A Joint Borrower, Sole Proprietor (JBSP) mortgage allows more than one person to be named on the mortgage, while only one person is named as the legal owner of the property.
This type of mortgage can sometimes be useful where someone wants help with affordability or borrowing capacity but does not want the additional borrower to own a share of the property.
For example, a parent may join their adult child’s mortgage application to help with affordability, while the child remains the sole owner of the property. The lender will consider the income and financial commitments of all the borrowers when assessing the mortgage.
The additional borrower will normally be responsible for the mortgage alongside the property owner. This means they could be liable for the mortgage payments if the property owner does not maintain them.
A JBSP mortgage is different from a standard joint mortgage, where the borrowers will usually also be joint owners of the property.
There can also be legal and tax implications depending on the circumstances. For example, the additional borrower may need independent legal advice, and the arrangement can have implications depending on whether they already own another property.
Not every mortgage lender offers JBSP mortgages, and those that do can have different criteria around income, age, affordability and the relationship between the borrowers.
At Opal Financials, we have access to a panel of mortgage lenders and can explain how a Joint Borrower, Sole Proprietor mortgage works and whether this type of arrangement may be suitable for your circumstances.