What is a JBSP mortgage?
A joint borrower sole proprietor mortgage is a product where two or more people are named on the mortgage but only one person (the proprietor) is named on the property title deeds. The additional borrower, usually a parent, contributes their income to the affordability assessment but has no ownership interest in the property.
This arrangement is particularly popular with first-time buyers whose parents want to help them borrow more without taking a share of the property. The parent’s income boosts the amount the lender is willing to offer, but the child is the sole legal owner of the home.
Benefits of a JBSP mortgage
The main advantage is that the helping family member avoids the stamp duty surcharge on additional properties, because they are not named on the title. If a parent who already owns a home were added to the deeds as a joint owner, the purchase would attract the 5% additional property surcharge, adding thousands to the cost.
JBSP mortgages also preserve first-time buyer status for the purchaser. Since the parent is not on the title, the buyer may still qualify for first-time buyer stamp duty relief and government schemes. Additionally, the parent’s position on the mortgage can typically be removed later once the buyer’s income has grown sufficiently.
How lenders assess JBSP applications
The lender assesses the incomes and financial commitments of all borrowers named on the mortgage. The parent’s income, debts, and credit history are all taken into account alongside the main buyer’s. Both parties must pass the lender’s affordability and credit checks.
Not all lenders offer JBSP products, and those that do may have specific criteria such as age limits for the supporting borrower, a requirement that the supporting borrower is a close family member, and limits on how many people can be on the mortgage.
Responsibilities for the supporting borrower
Even though the supporting borrower does not own the property, they are fully liable for the mortgage debt. If the main borrower misses payments, the lender can pursue the supporting borrower for the full outstanding amount. This is a significant commitment that the supporting borrower must understand clearly.
The mortgage will also appear on the supporting borrower’s credit file and may affect their ability to borrow in their own right. If the parent is planning to remortgage their own home or take out other credit, the JBSP commitment could reduce what lenders are willing to offer them.
Is a JBSP mortgage right for your family?
JBSP mortgages are ideal when the buyer has a steady income but not quite enough to borrow what they need, the family member wants to help without being on the title or triggering the stamp duty surcharge, and the buyer wants to maintain first-time buyer benefits.
At Clearview Mortgage Solutions, we can explain the JBSP options available, compare products across lenders who offer this type of mortgage, and ensure both parties understand their responsibilities. Contact us for a free, no-obligation chat.