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Five Things You Should Know About… joint borrower sole proprietor mortgages

  joint borrower sole proprietor mortgages 
Charles Morley offers some key insights on joint borrower sole proprietor mortgages.

  1. Who can this help? The product is predominantly geared to helping close family members either get onto the property ladder or move home. Often parents choose to act as the second applicant, using their income to maximise mortgage lending, however only the first applicant appears on the mortgage deeds. This ultimately means that parents’ or family members’ higher salaries can be used to support lower incomes, without co-owning the property.
  2. What term can the mortgage be taken over? The maximum age at the end of the mortgage term can be as high as 80, meaning that the mortgage can be spread over an affordable term for everyone involved.
  3. How many applicants can be considered? Typically up to four applicants can be on the mortgage, with up to four incomes considered in some cases.
  4. Is it only for residential products? Joint borrower sole proprietor mortgages exist for both residential and buy-to-let loans.
  5. What else? This can be a good option to help first time buyers in a market where house prices have risen significantly in recent years and affordability checks remain comprehensive. It also gives parents, or whoever is supporting with the mortgage, an easy exit strategy when the first applicant can afford the loan in their own right.

Charles Morley is director of mortgage distribution at Metro Bank

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  • Chris Hulme 16th March 2018 at 7:21 am

    These can be used to great effect in dealing with the additional 3% Stamp Duty levy and Metro have been excellent at making the mortgage side of the process happen. It is also worth noting that it doesn’t work for a married couple where say one party has a property they are keeping and that party is not named on the Deeds of the new house. It is therefore invaluable to have the solicitor confirm the use of Joint Mortgage/ Sole Proprietor will achieve the aims before applying.