NatWest has recently unveiled a new product designed to help first-time buyers secure a property, even if they lack sufficient funds or a robust credit history. The NatWest Joint Borrower Sole Proprietor Mortgage is aimed at boosting the mortgage borrowing power of eligible customers, enabling them to get on the property ladder with the assistance of a friend or family member. This scheme, already adopted by other lenders, allows individuals to purchase a property in their own name while sharing the mortgage responsibility with a non-owning borrower. With rising property prices and the challenges many first-time buyers face in securing a mortgage, this new product offers a much-needed solution. In this article, I’ll explore what a Joint Borrower Sole Proprietor mortgage is, its eligibility criteria, and the potential benefits and risks it offers both buyers and their supporters.
How Does the NatWest Joint Borrower Sole Proprietor Mortgage Work?
The Joint Borrower Sole Proprietor (JBSP) mortgage allows a first-time buyer to apply for a mortgage alongside a friend or family member who does not intend to own the property. While the mortgage is joint, only the buyer’s name will be on the property deed. The key feature of this mortgage is that the liability for the loan rests with both the applicant and the non-owning borrower. This makes it easier for buyers to afford a property they might otherwise be unable to purchase on their own. By involving a non-owning borrower, whether a parent, relative, or even a friend, the main applicant’s mortgage borrowing power is boosted, offering access to a higher loan value. Potentially significantly increasing the chances of mortgage approval for buyers struggling with large deposits or limited credit histories.
Eligibility Criteria for the NatWest Joint Borrower Sole Proprietor Mortgage
NatWest’s JBSP mortgage has specific eligibility requirements that applicants must meet in order to qualify. These are designed to ensure the borrower’s ability to manage their mortgage while still keeping the process secure for all parties involved.
- Minimum Income Requirement: The main applicant must have a gross annual income of at least £20,000. This can be made up of all acceptable income types, including salary, bonus payments, and other earnings.
- Age Requirements: Applicants must be aged between 18 and 75 years old.
- Non-Owner Borrower: The person helping to secure the mortgage does not have to be a family member. A friend can also act as the co-borrower, expanding the potential support network for first-time buyers.
- Mortgage Exclusions: The Joint Borrower Sole Proprietor mortgage is not available for certain schemes such as Right to Buy or Shared Equity.
- Residential Property Only: The scheme is available only for Residential Purchase Products, and applicants must be purchasing a property to live in, not for buy-to-let purposes.
- Maximum Number of Applicants: Only two applicants are allowed: the main owner/occupier and the non-owning borrower.
- Independent Legal Advice: To ensure the non-owning borrower fully understands their obligations, they must seek independent legal advice before completing the mortgage. This is a vital step in the process to protect all parties involved.
NatWest Support for First-Time Buyers
Alongside the new Joint Borrower Sole Proprietor mortgage, NatWest has taken steps to enhance their mortgage affordability process:
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Improved Affordability Calculator: NatWest has upgraded its affordability calculator, making it easier to assess Loan-to-Income (LTI) ratios for residential capital and interest mortgages. This helps customers better understand how much they can borrow.
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Exclusive Products Up to 95% LTV: For eligible customers, NatWest offers exclusive mortgage products with Loan-to-Value (LTV) ratios of up to 95%, making it easier for first-time buyers to access the property market.
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Deposit Support: NatWest accepts deposits and gifts from immediate family members, treating them as though they were the customer’s own deposit. This helps those who may not have sufficient savings for a large deposit but have family members willing to support their purchase.
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Multiple Income Streams: The bank also considers multiple income streams when assessing affordability, allowing first-time buyers to apply using all available income sources.
Legal and Financial Implications of the Joint Borrower Sole Proprietor Mortgage
While the NatWest Joint Borrower Sole Proprietor mortgage offers numerous benefits, it’s important to note that there are significant legal and financial implications for both parties involved. The non-owning borrower shares responsibility for the mortgage, meaning they will be liable for the debt if the main borrower defaults on the loan. Before proceeding with this scheme, it is crucial that both the buyer and the non-owning borrower seek independent legal advice and consult with a qualified mortgage advisor. This will ensure they fully understand the terms and obligations associated with the mortgage.
Louis Mason, Marketing and Communications Director at Oportfolio Mortgages, said, “The Joint Borrower Sole Proprietor mortgage is an exciting development for the first-time buyer market. It offers a solution for buyers who may struggle to secure a mortgage on their own while helping family and friends assist their loved ones in achieving their homeownership dreams. However, we always advise our clients to consult with both legal and mortgage experts before proceeding, as the financial and legal responsibilities are shared.”
Speak To A Mortgage Professional
The NatWest Joint Borrower Sole Proprietor mortgage provides an invaluable opportunity for first-time buyers to get on the property ladder sooner. With the help of a family member or friend, buyers can increase their borrowing power and purchase their dream home, even if they’re struggling with limited deposits or credit issues. However, due diligence is essential, so be sure to seek independent legal advice and speak to a qualified mortgage advisor before making any decisions. If you are considering the NatWest Joint Borrower Sole Proprietor mortgage or have questions about your mortgage options, contact Oportfolio Mortgages today to schedule a consultation with one of our expert advisors.
