With the ever increasing struggle for first time buyers to raise a deposit and manage the monthly repayments on their own mortgage, Furness might just have the answer.
Joint borrower sole proprietorship mortgages are a great solution for young people looking to get on that first rung of the property ladder and who have family members who are willing to help them out until they are earning enough to support the mortgage themselves.
This solution from Furness allows family members to join the mortgage so that their income can be used when assessing the case but there is no need for them to be added to the title deeds. Furness use their standard lending criteria and there is no need for any additional security such as savings to be taken as collateral.
This solution will also work for parents who own their own home and will not want to be caught by the increased stamp duty that could apply if they had to appear on the title deeds.
All borrowers would need to seek separate and independent legal advice as part of the conveyancing process.
All borrowers must sign the mortgage deed in front of the solicitor acting as the conveyancer. This must be on a face to face basis.
Release of one of the borrowers from the mortgage will require approval from the Society and be based on the mortgage being affordable by the remaining parties. Any legal costs incurred will be the responsibility of the borrowers.
If you’ve got clients who you think would benefit from a joint borrower sole proprietorship mortgage or you’d like to talk to us to find out more just give us a call on 0800 988 1561.
Below is an example of how we were able to help a broker to find a solution for his client
Peter Smith is 28 years old and is an apprentice IT support worker within the pharmaceutical industry, he has a full time permanent contract with a salary of £30k. He has a car loan £200pm. He wants to buy a house and borrow £140k on a 25 year term – he has saved 10% deposit.
When he completes his apprenticeship he will be earning approx. £40k (confirmed by employer) and this will increase further each year plus when he finishes his exams he would also be able to gain further work within the industry.
His mother, Pauline, is 50 years old and works as a midwife and earns £35k. She has no credit commitments but has a small joint mortgage with her husband of £66k on her residential property. This property is valued at £250k. She also owns a BTL property jointly with her husband, with an outstanding balance of £74k on a value of £210k – the rent received is £1400 pcm with mortgage payments £400pm.
Pauline will have a private pension and state pension and husband is retired in receipt of private and state pension – pension income for both overall approx. £70k
Peter’s mum was happy to join the mortgage but did not wish to be on the title deeds.
The mortgage was approved on this basis due to the prospects of Peter’s income improving, mum’s income and their overall financial stability.