Joint Borrower Sole Proprietor Mortgages: all you need to know
Your home may be repossessed if you do not keep up repayments on your mortgage
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Buy your home with help from your family with a Joint Borrower Sole Proprietor Mortgage
What is a Joint Borrower Sole Proprietor Mortgage?
A Joint Borrower Sole Proprietor mortgage is a loan to buy a home where there are more applicants on the mortgage than there are homeowners. The house buyer borrows money with a close family relative but that relative is not mentioned on the title deeds of the property.How can a Joint Borrower Sole Proprietor Mortgage help me?
By buying with others, you can increase the amount of money a mortgage provider will lend you. When reviewing your application, the lender will assess how likely you are to be able to repay the loan. Borrowing with someone else means you share the responsibility of mortgage repayments making you a less risky option for the lender (multiple borrowers means multiple incomes available to contribute to the monthly repayment). If you’re a first-time buyer, this might be the only way you can pull together the funds to be able to purchase a home.How does a Joint Borrower Sole Proprietor Mortgage work?
When you make your mortgage application you’ll apply with up to four borrowers; one or two can be listed as the occupying-borrower(s) with an additional one or two non-occupying borrower(s). With most lenders, you can only borrow with close family members which means a parent or stepparent. In the case of reverse Joint Borrower Sole Proprietor mortgages, a buyer can make a mortgage application with the help of an adult child. We work with lenders who will also allow Joint Borrower Sole Proprietor mortgage applications which can include the aunt(s), uncle(s) or grandparents of the owner-borrower.What should I bear in mind when considering a Joint Borrower Sole Proprietor mortgage?
Taking out a mortgage to buy a home is a big investment and a long-term commitment. If you choose to buy your home with a Joint Borrower Sole Proprietor mortgage you are effectively bound to the other non-occupying borrowers for as long as that mortgage exists. There are some important things to think about before going ahead:- The death of the occupying borrower means the non-occupying borrower is responsible for all payments until the house is sold.
- Equally, if the occupying borrower is ill or has an accident and can no longer work, the non-occupying borrower will have to make the mortgage payments on their own if the right protection is not arranged when you take out the mortgage.
- A family dispute doesn’t invalidate or override the mortgage repayments due i.e. no matter the state of your personal relationship, all parties will still be jointly responsible for the repayments.
- If either the occupier or the non-occupying borrower(s) retire or loses their job, the other borrower is responsible for making repayments on the mortgage.