What is a Joint Borrower, Sole Proprietor mortgage?

Joint Borrower, Sole Proprietor, is where not all persons listed on the mortgage are the property’s legal owners. This is also referred to as a JBSP mortgage. This enables the use of other parties’ salaries when determining affordability. This can increase the amount of mortgage allowed.

This arrangement functions similarly to the more common guarantor mortgage. However, the parties not identified as the property owner are accountable for the whole debt instead of only guaranteeing the monthly payment. This is known as joint and multiple responsibility.

Affordability is not only crucial when determining your eligibility for a mortgage, but also when discovering which mortgages are available to you. If the outcome of your affordability check believes you to be a risk, you are limited in what you can access.

In these situations, the addition of a guarantor is usually suggested. But this is not always a favourable solution to lenders. Nonetheless, Joint Borrower, Sole Proprietor mortgages are a viable option that may be less well-known than the guarantor mortgage.

How do Joint Borrower, Sole Proprietor mortgages work?

When applying for a JBSP mortgage, the income of up to four other people can be considered. The other individuals whose incomes are considered, are commonly parents or close relatives. This can allow you to borrow more compared to applying as an individual.

For example, if your yearly income is £20,000 and a lender may be willing to lend you between 4.5 and 5 times your income, the most you can borrow is £100,000 and the minimum being £90,000.

One of your parents earns £30,000 a year, so you could apply with them. Therefore, if you combine your income, you have a total of £50,000. Meaning you could potentially borrow in excess of £200,000. Giving you an additional £100,000 when compared to what you could have initially borrowed.

What’s the eligibility for a Joint Borrower, Sole Proprietor?

The most frequent requirement is for a parent or guardian to provide financial assistance. However, for many lenders, this is optional.

Many will welcome any family member or friend with no constraints on the nature of the relationship. Any parties that are listed on the application must be aware that this commitment may have an influence on any future borrowing they may require. And that they will also be expected to seek independent legal counsel in all situations.

As mentioned previously, there can be more than two applications, although normally, there will be no more than four.

Joint Borrower Sole Proprietor mortgage lenders

As JBSP mortgages become more popular, there are more JBSP mortgage lenders entering the market. To be eligible, you must meet specific criteria given as requirements by lenders.

Each lender has its own criteria, so even if you meet one lender’s criteria, you may not when it comes to others. We recommend you discuss your options with a mortgage broker. They are best placed to provide advice based on your circumstances and can guide you through the process.

Fill out our quick and easy mortgage affordability calculator below. We only require a few details to see how much you may be able to borrow.

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What are the requirements for a Joint Borrower, Sole Proprietor mortgage?

Although lenders’ requirements for a Joint Borrower, Sole Proprietor mortgage can and do vary, we’ve outlined a few of the most important factors:

• The “primary” borrower(s) must occupy the residence.
• The maximum term will be determined by the age of the applicant with the highest income.
• Available on any repayment option, i.e., repayment or interest-only, subject to an approved repayment plan.
• All non-owners must obtain independent legal counsel.
• Incompatible with some other loan programmes, such as joint ownership.
• Can be used to aid with the level of borrowing, but not to acquire a mortgage with a poor credit score.