Joint borrower sole proprietor mortgages (JBSP) help alleviate the stress some first time property buyers experience when seeking a mortgage. JBSP mortgages have risen in popularity lately, which is great for mortgage applicants struggling to get on the property ladder. The economic environment is difficult at the moment – house prices have increased considerably in recent years and affordability checks are increasingly more stringent.
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Who is a JBSP Mortgage for?
This type of mortgage is perfect for individuals who don’t have the desired salary required for many loans out there, but they do have a close family member with a higher salary that would be willing to help.
For instance, often parents will offer up their assistance as the second applicant.
The higher income associated with the application brings in more lending options, but second borrowers don’t appear on the mortgage deeds.
This way, there’s no concern for the relatives about property ownership and this arrangement with someone whose name is only on the mortgage and not the deeds works in every party’s favour. This also pardons them from having to pay 3% stamp duty surcharge and forfeits any rights to the property.
Residential and buy to let options
Your options aren’t only limited to your parents as up to four applicant’s income can be considered with the mortgage application.
You can also take out mortgages with terms of up to 80 years allowing you to create a flexible, affordable repayment plan.
The great thing about JBSP mortgages is that they are available for both residential and buy-to-let mortgages.
So, whether your dream is a terraced house with a big garden or a property that provides rental income, you may be able to use a JBSP mortgage to help achieve it.
Managing relationships
Sometimes, the relationship with your family member may get rocky or splinter completely. In these cases it will be a huge task for the non-legal owner to get their name removed from the mortgage.
This could create a difficult situation as the borrower on the deed may not be able to afford the mortgage themselves.
If they wanted to have their name removed, they would be faced with an expensive, drawn out legal battle.
With that in mind, try to choose the partner in this venture carefully.
If you have questions about joint borrower sole proprietor mortgages or if you think you may benefit from this approach to home buying, get in touch with an expert at Dental and Medical Financial Services.
We specialise in assisting first time home buyers get onto the property ladder.
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Dental & Medical Financial Services have been helping doctors and dentists with finding low-cost mortgages for your home and investment properties for over 25 years. Call Chris to discuss your options.
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