If you’re looking to buy a property but are struggling to secure a mortgage for the amount you need, then a joint borrower sole proprietor mortgage could be the answer.

In today’s economic climate, many potential homeowners face challenges in affordability. The ongoing cost-of-living crisis and the surge in house prices over recent years have made it difficult for many to save for a deposit. ‘The Bank of Mum and Dad’ is now common way first-time buyers are getting onto the property ladder, joint borrower sole proprietor mortgages (JBSP) are a viable way for borrowers to increase the amount they can borrow with the help of their families.

What is a JBSP Mortgage? A JBSP mortgage is a specialist product that allows up to four borrowers to apply for a mortgage together, but with only one borrower listed as the sole proprietor. It’s a way for a friend or family member to help a buyer improve their affordability, without having to physically hand over any money.

All the borrowers are equally responsible for repaying the mortgage, which lowers the risk for lenders, but as the application will be based on the combined income of all listed ‘borrowers,’ it increases the amount that can be borrowed, a huge benefit for the would-be homeowner. This can help someone get onto the property ladder sooner or help them afford a better property than they would be able to purchase on their own.

How Does a JBSP Mortgage Work? Applying for a JBSP mortgage is similar to applying for a standard mortgage. All borrowers will be assessed by the lender based on their income, credit score, and other financial factors.

Once approved, the property will be registered in the name of the sole proprietor, but all borrowers will be equally responsible for making mortgage payments. This means if one borrower is unable to make their payments, the other borrower(s) will need to cover the full amount. It’s important to note that all borrowers will be equally liable for any missed payments or defaults, regardless of who is listed as the legal owner; missed payments could impact the credit scores of all borrowers.

Is a JBSP Mortgage Right for Me? As with most mortgage products, there are pros and cons to weigh up before applying. A JBSP mortgage can increase borrowing capacity and lower risk for lenders, making it an attractive option for potential first-time buyers. However, it does come with drawbacks, including limited control for additional borrowers and financial risk for non-proprietor borrowers.

How to Apply for a JBSP Mortgage The application process for a JBSP mortgage involves finding a lender, gathering your documents, submitting your application, agreeing on terms, and completing the legal process. Using a mortgage broker can speed up the process thanks to their industry knowledge and understanding of what different lenders might offer.

If you’ve carefully considered the risks and have a clear agreement with all involved parties, a JBSP mortgage can make homeownership a reality where it may not have been possible before.

For more information or to get in touch please visit: https://riachfinancial.co.uk/contact