Joint Borrower Sole Proprietor FAQ’s
To help give you more information and guidance on our Joint Borrower Sole Proprietor products, we’ve put together answers to the following Frequently Asked Questions.
What is a Joint Borrower Sole Proprietor (JBSP) Mortgage?
JBSP mortgages use the income of a family member to increase the amount you are able to borrow. By combining income, you are able to borrow more. A family member is often parent/child although we will consider other familial relationships. So in the case of parent/child, the child might be the occupier of the property and the parent the support or vice versa. This means that property ownership may be possible in cases where, without the supporting borrower, it would not
So, does that mean all parties to the mortgage are also owners of the property?
No, only the occupier(s) own the property, the joint borrower(s) not living in the property will be named on the mortgage but have no legal ownership of the property itself.
How many people can be named on the mortgage?
A maximum of 4, this would be 2 owner occupiers and 2 non-occupying joint borrowers. Where there are 2 non-occupying joint borrowers, they must be from the same household.
How much income is required by the owner-occupier applying for a Joint Borrower Sole Proprietor Mortgage?
The owner-occupier must have independent employed, self-employed and/or pension income and must be able to cover a minimum of 25% of the loan amount.
Should all borrowers get legal advice?
Yes, it’s a condition of the mortgage that all borrowers receive independent legal advice before entering into the contract.
What if our circumstances change?
It’s important to understand that all parties named on the mortgage are jointly and severally liable for the mortgage and therefore all borrowers must be comfortable that this, like any mortgage is a long term commitment. The mortgage will appear on the credit file of all parties. If at some point in the future the non-occupying borrower(s) are to be removed from the mortgage, this would be done by Transfer Of Equity and this would rely on the remaining borrower(s) applying for the mortgage in their name and their circumstances fitting our lending criteria at the time, particularly in terms of affordability. Additional legal work would be required.
What would happen if one of the borrowers were to die?
If the non-occupying borrower(s) were to die, the responsibility would fall to the remaining borrower(s) to pay the mortgage unless there were life assurance policies in place. If the occupying borrower(s) were to die, the remaining borrower(s) would be responsible for the mortgage debt unless there was a life assurance policy in place but in this case, you must be aware that whilst the non-occupying borrower(s) are still responsible for the mortgage, they have no entitlement to the property ownership, unless separate legal arrangements are made to this effect.
Please be aware that our FAQs do not cover all aspects of our lending criteria, for further information or guidance please use our online contact form or telephone us on 01509 610707.
