With house prices rising faster than salaries, getting on the housing ladder can seem an unrealistic possibility for many First Time Buyers without the help of Mum and Dad.

Even with a good deposit, securing a mortgage can still be difficult for many given that lenders generally restrict their maximum borrowing to around 4.5x income. As always, there are exceptions and some lenders will consider at higher multiples but that isn’t available to everyone.

This is where a Joint Borrower, Sole Proprietor mortgage can really help. Unlike a traditional mortgage where each party is also an owner, Joint Borrower, Sole Proprietor allows up to 4 applicants to apply together with each income considered towards affordability. In theory, this allows parents to contribute towards affordability without becoming an owner, which is important when it comes to Stamp Duty Land Tax.

First Time Buyers currently qualify for full Stamp Duty relief on purchases up to £300,000, and relief on the first £300,000 of purchases up to £500,000. With a traditional joint mortgage, this relief would not be available if the parent was already homeowners and what’s more, an additional 3% stamp duty surcharge may also be incurred as the parent would be purchasing a ‘second home’. Thankfully, with Joint Borrower, Sole Proprietor avoids this problem as the parent would not be an owner, which could save thousands.

As all applicants will be equally responsible for the payments, if one person defaults the remaining parties would be liable. Understandably, lenders require any non-proprietors to obtain independent legal advice to ensure they are aware of the commitment they are making which will incur additional cost.

Although this type of mortgage is not common, there are several lenders who will consider it, including Skipton Building Society, Metro Bank, Virgin Money, and Barclays to name a few. It isn’t going to be suitable for everyone but for those who are struggling to obtain a traditional mortgage it can provide an alternative route to home ownership.

To find out more, give us a call on 01904 897 667