Joint Borrower Sole Proprietor Mortgage
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Joint Borrower Sole Proprietor Mortgage
James Bull explains how a Joint Borrower Sole Proprietor mortgage works and how it can be a helpful option.
What is a Joint Borrower Sole Proprietor (JBSP) mortgage and how do they work?
It’s a mortgage where there are extra people named on the mortgage, who aren’t named on the deeds of the house. The usual reason why people do this is to use the incomes of the extra people on the mortgage to increase the amount they can borrow.
What criteria do you need to meet for a JBSP mortgage and who is eligible for one of these?
The criteria is very similar to a normal mortgage – the only difference is that it allows people to be named on the mortgage who aren’t on the deeds.Some lenders do have specific additional criteria, but it really varies between lenders – and not all of them offer this product. So if this particular product is of interest, the best thing to do is contact us directly and we’ll give advice based on your specific circumstances.
Do you pay stamp duty on JBSP mortgages?
This is one of the big benefits of this kind of mortgage. Stamp duty is based on the circumstances of the people named on the deeds. So if somebody is named on the mortgage but not on the deeds of the house, their circumstances are ignored for stamp duty purposes.
That’s especially handy if the extra people on the mortgage are already homeowners, as they would avoid the higher rate of stamp duty.
Can you have a sole mortgage on a joint property?
That’s like a backwards JBSP – but no. Everybody named on the deeds of the house also has to be named on the mortgage.
What’s the difference between a joint mortgage and a JBSP mortgage?
On a traditional joint mortgage, everyone named on the mortgage is also named on the deeds of the house – that’s probably what 99% of people have got.
With a Joint Borrower Sole Proprietor mortgage, not everybody on the mortgage is named on the deeds to the property.
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Everyone’s different. You might be self-employed. You might have some credit history issues – whatever your situation, we will find the most suitable product available to you from across the whole market.
What’s the difference between a guarantor mortgage and a Joint Borrower Sole Proprietor mortgage?
There’s not much difference in practical terms. If somebody’s a guarantor or if they are the additional person named on the Joint Borrower Sole Proprietor mortgage, they are both guaranteeing the mortgage. They’re still liable for 100% of the mortgage payments.
Ultimately, if the main borrowers default, the additional person is in the same position. The main difference is just lender criteria around these products, in terms of who qualifies and what their circumstances need to be.
Can I get a Joint Borrower Sole Proprietor mortgage with bad credit?
All parties that are named on the mortgage do have to pass the lender’s credit score. Having said that, some lenders do accept bad credit. If you personally do fall into this category then contact us, send us copies of all applicants’ credit reports and we can have a look for lenders that match those circumstances.
How does remortgaging a Joint Borrower Sole Proprietor mortgage work?
The process of remortgaging is exactly the same. The main difference is that the extra people on the mortgage might eventually want to come off it.
If the circumstances of the main applicants allow, you can just remortgage as normal in those names. It’s minimal effort to remove the other parties.
But if the main applicant’s circumstances don’t support the full mortgage on their own, the options for remortgaging might be more limited. The best thing to do is contact us for advice when you get to that point and we’ll walk you through it.
What are the pros and cons of a Joint Borrower Sole Proprietor mortgage?
The main pros are that having additional borrowers on the mortgage can boost the amount you can borrow. That’s the main reason people do it.
Also, not being named on the deeds can save the higher rate of stamp duty, if the additional borrowers already own a property.
It’s not really a negative, but it’s important to understand that all parties named on the mortgage are equally liable for 100 % of the mortgage payments. That’s something that needs to be considered if you are thinking of helping someone out.
How can a mortgage broker help with a Joint Borrower Sole Proprietor mortgage?
As mortgage brokers, we deal with this type of enquiry every day. Lender criteria does vary widely on this kind of product. We can definitely help the process go much more smoothly by recommending the right lender for an individual’s personal circumstances.
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