What is a JBSP mortgage?
A joint borrower sole proprietor mortgage is one where two or more people are named on the mortgage, but only one of them, the proprietor, appears on the property title deeds. The extra borrower, usually a parent, adds their income to the affordability assessment yet holds no stake in the property itself.
It is a popular route for first-time buyers whose parents want to help them borrow more without owning any part of the home. The parent’s income lifts the figure the lender will offer, while the child stays the sole legal owner.
Benefits of a JBSP mortgage
The main benefit is that the family member helping out steps around the stamp duty surcharge on additional properties, because their name never goes on the title. Add a parent who already owns a home to the deeds as a joint owner, and the purchase would pick up the 5% additional property surcharge, which can add thousands to the bill.
They also keep the buyer’s first-time buyer status intact. With the parent off the title, the buyer can still qualify for first-time buyer stamp duty relief and government schemes. And the parent can usually be taken off the mortgage further down the line, once the buyer earns enough to carry it alone.
How lenders assess JBSP applications
The lender weighs up the income and financial commitments of everyone named on the mortgage. So the parent’s income, debts, and credit history all come into the picture alongside the main buyer’s, and both of you have to pass the lender’s affordability and credit checks.
Not every lender offers JBSP products, and the ones that do often set their own conditions. Common ones include an age limit for the supporting borrower, a rule that they must be a close family member, and a cap on how many people can be named on the mortgage.
Responsibilities for the supporting borrower
The supporting borrower owns none of the property, but they are still fully liable for the mortgage debt. If the main borrower falls behind, the lender can come after the supporting borrower for the whole outstanding balance. That is a serious commitment, and anyone stepping into it needs to go in with their eyes open.
The mortgage also shows up on the supporting borrower’s credit file, which can affect how much they can borrow themselves. A parent who is thinking about a remortgage on their own home, or any other new credit, may find the JBSP commitment trims back what lenders will offer.
Is a JBSP mortgage right for your family?
A JBSP mortgage tends to fit best where the buyer has a steady income but falls just short of borrowing what they need, and a family member is willing to help without going on the title or setting off the stamp duty surcharge. It also suits buyers who want to hold on to their first-time buyer benefits.
At Clearview Mortgage Solutions, we can walk you through the JBSP options, compare products across the lenders who offer them, and make sure both of you are clear on what you are taking on. Get in touch for a free, no-obligation chat.