An increasingly popular solution to supporting your children’s future
As the cost of living continues to rise and the prospect of homeownership becomes increasingly elusive for many young people, parents are stepping up to provide a helping hand. One innovative solution gaining popularity is the Joint Borrower Sole Proprietor (JBSP) mortgage.
With a JBSP mortgage, parents can leverage their income as joint borrowers on their children’s mortgage applications to increase affordability without being listed as an owner of the property.
Understanding Joint Borrower Sole Proprietor Mortgages
JSBP mortgages provide the sole proprietor with increased affordability. By combining incomes, they can qualify for a larger mortgage. This is particularly ideal for anyone in the early stages of their career with expected future income growth.
This solution doesn’t require collateral from the joint borrower. While they are responsible for financial repayments if the sole borrower fails to meet them, only one person (the sole proprietor) owns the property. This also enables the sole proprietor to benefit from reduced stamp duty land tax (SDLT). If the sole proprietor is a first-time buyer, and the property falls within the relevant threshold, they can also benefit from first-time buyer SDLT relief.
Real-Life Example
Recently, we worked with a parent who wanted to help their daughter purchase her first home. The daughter, a young professional with limited savings, was struggling to save enough for a deposit. By using a JBSP mortgage, her father was able to add his income to the mortgage application, boosting his daughter’s affordability and allowing her to secure a mortgage.
The daughter was overjoyed to finally have her own home and expressed her deep gratitude to her father for his support. Her father, in turn, felt a sense of fulfilment and was overjoyed knowing that he had helped his daughter achieve a major milestone in her life.
Is a JBSP Mortgage right for you and your child?
If you’re a parent considering helping your child purchase a home, a JBSP mortgage may be an excellent option. We can work with you to assess your financial situation and determine if a JBSP mortgage is the right choice.
Contact us today to learn more about JBSP mortgages and how they can help your loved ones achieve their homeownership goals.
Please note: a mortgage is secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
