Getting onto the property ladder can be difficult when the mortgage you need is higher than the amount you can borrow based on your income alone. That’s exactly the situation one of our clients faced.
They had found a property they wanted to buy and had a deposit available, but their individual income wasn’t enough to secure the mortgage required through a standard application.
Rather than increasing the deposit or abandoning the purchase, we explored whether a joint borrower sole proprietor mortgage, also known as a JBSP mortgage, could provide an alternative solution.
By including a family member as a supporting borrower, their income could be considered alongside our client’s for mortgage affordability without the family member becoming a legal owner of the property.
The Client
Our client had found the property they wanted to purchase and had a deposit available, but there was a shortfall between the mortgage they needed and the amount available based on their income alone.
The challenge wasn’t simply finding a mortgage lender. It was finding one whose affordability criteria worked with the amount required and the family support available. This led us to consider a joint borrower sole proprietor mortgage.
What Is A Joint Borrower Sole Proprietor Mortgage?
A joint borrower sole proprietor mortgage allows more than one person’s income to be considered for mortgage affordability while fewer people are named as legal owners of the property.
For example, a parent may be named as a supporting borrower alongside their adult child. Both are responsible for the mortgage, but the child can remain the sole proprietor of the property.
This can be particularly useful where a buyer’s income falls short of the amount required under a lender’s standard affordability assessment.
For a more detailed explanation of how these mortgages work, read our guide toJoint Borrower Sole Proprietor Mortgages.
The Mortgage Affordability Problem
Mortgage lenders don’t all assess affordability in exactly the same way. Income is important, but lenders can also consider existing debts, regular expenditure, dependants, credit commitments and other financial circumstances.
Our client wasn’t able to borrow the mortgage amount required using their income alone. However, they had a family member willing to support the purchase.
Rather than becoming a joint owner of the property, the family member could potentially join the mortgage as a supporting borrower. Their income could then be considered as part of the lender’s affordability assessment.
Finding A Suitable JBSP Mortgage Lender
Not every lender approaches joint borrower sole proprietor mortgages in the same way.
Lender criteria can vary depending on:
- Who can act as a supporting borrower
- How much income can be considered
- The supporting borrower’s age
- Existing mortgage and credit commitments
- Maximum mortgage term
- Loan-to-value
- Independent legal advice requirements
This meant we needed to look beyond simply finding a lender that offered JBSP mortgages. We assessed the circumstances of both our client and their supporting family member to identify a lender whose JBSP affordability criteria suited the application.
The Solution
By structuring the application as a joint borrower sole proprietor mortgage, the supporting family member could be included as a borrower and their income considered for affordability.
Crucially, the supporting family member didn’t need to become a legal owner of the property. By using their income as part of the affordability assessment, we were able to overcome the client’s original borrowing shortfall and secure the mortgage required for the purchase.
Our client could therefore proceed with buying their home while remaining the sole proprietor of the property.
Why Was A JBSP Mortgage Suitable?
A JBSP mortgage addressed the two key requirements in this case: our client needed additional income to support affordability, while their family member was prepared to take responsibility for the mortgage without becoming an owner of the property.
The structure therefore provided an alternative to relying on the client’s income alone.
If you’re considering a similar arrangement, our Joint Borrower Sole Proprietor Mortgage Calculator can provide an initial indication of potential borrowing.
Oportfolio Insight
A joint borrower sole proprietor mortgage isn’t simply about adding another person’s salary to increase borrowing. The supporting borrower’s existing mortgage, expenditure, debts, age and other commitments can all affect the lender’s affordability assessment.
The value of mortgage advice in a JBSP case is therefore not simply knowing which lenders offer the product. It’s understanding which lender’s affordability model and criteria work for the circumstances of everyone involved.
In this case, structuring the application correctly allowed family support to strengthen the client’s mortgage affordability while keeping the property ownership structured appropriately.
Key Takeaways
- Our client couldn’t borrow the mortgage amount they needed based on their income alone.
- A family member was willing to support the mortgage application.
- A joint borrower sole proprietor mortgage allowed the family member’s income to be considered for affordability.
- The supporting borrower could take responsibility for the mortgage without becoming a legal owner of the property.
- JBSP affordability and eligibility criteria vary between lenders, making lender selection particularly important.
In Summary
A mortgage affordability shortfall doesn’t necessarily mean a property purchase has to end. For this client, a joint borrower sole proprietor mortgage allowed family income to support the application while keeping ownership of the property with the main buyer.
The key was finding a lender whose JBSP criteria worked with the circumstances of both the buyer and supporting borrower.
Could A Joint Borrower Sole Proprietor Mortgage Help You?
If you can’t borrow enough for the property you want based on your income alone, a JBSP mortgage may be worth exploring.
At Oportfolio Mortgages, we can assess the circumstances of both the main buyer and supporting borrower, assess potential affordability and compare suitable joint borrower sole proprietor mortgage lenders.
Try our Joint Borrower Sole Proprietor Mortgage Calculator or speak to our mortgage advisers to discuss your circumstances.
