Today mortgage lender Accord Mortgages announced that they will now offer Joint Borrower Sole Proprietor mortgages. This new revelation from Accord is great news for people looking to purchase their first property, who might fall short of the regular high mortgage affordability tests of other lenders. This move from Accord could mean that thousands of first time buyers could realise the dream of homeownership much earlier than they initially anticipated.
First Time Buyers and Joint Borrower Sole Proprietor Mortgages
We unfortunately live in a time where the average age of a first time buyer is creeping up and up. Currently the average age of a first time buyer in London is around 35 years old, and the average for the rest of the country is not far behind. This is mainly driven by house prices which have increased significantly over the last 20 years, the higher demands from mortgage lenders in terms of affordability and deposit requirements, and the rising cost of living eating away at people’s savings.
To purchase a property you need a minimum of 5% deposit with most lenders asking for more. With the average property price in London being over £500,000 that means that first time buyers will need a minimum of £25,000 deposit and then will need to earn enough to cover the remaining £475,000 (Around £105,000 income needed). For a lot of potential first time buyers, this means that home ownership could be very difficult to achieve. However, there are options. Schemes such as shared ownership and products such as joint borrower sole proprietor loans.
What Is a Joint Borrower Sole Proprietor Mortgage?
Joint borrower sole proprietor is a product that some lenders offer where you can opt to apply for a mortgage with a family member (normally a parent) and only one person will live in the home. This means that a potential single first time buyer could go on a mortgage with their parent for affordability purposes but will own the property in their name alone. Different lenders have different criteria rules around this product, but this is generally how it works.
Accord mortgages have announced that they will now be offering joint borrower sole proprietor loans. This is the communication they have sent out to brokers today:
With our new JBSP mortgages, if you have a client who needs extra income for affordability, they can now apply with an immediate family member as a non-owner borrower on their mortgage to help them achieve their home ownership aspirations.
What else do you need to know?
- Maximum of 2 applicants – 1 owner and 1 non-owner borrower who are both responsible for the mortgage
- Immediate family only for non-owner borrower
- Minimum £20k income for the owner borrower
- Non-owner borrower’s household expenditure and debts will also need to be entered
- Independent Legal advice is required for the non-owner borrower as a condition of the mortgage offer
- Excludes
- Cascade Score
- Boost LTI
- Interest Only
- Deposit Unlock
Speak To a Mortgage Broker
If you are thinking of buying your first home and want to discuss your buying options, the best thing to do is to arrange an appointment with one of our first time buyer mortgage experts. You can book in a face to face, telephone, or zoom appointment with out advisors for free and they will be able to go through all of your options with you. Call us or send us an email today to see how we can help.
