Emma: Helping the next generation with a JBSP solution

Who did we help?

Emma had recently graduated from university and having entered the job market in London, was keen to purchase her first home. But although she had built up valuable experience through a number of short-term employment contracts, she had not yet established the level of consistent income required to support the mortgage she needed.

Her parents, Daniel and Hannah, are both in their early 60s and in a strong financial situation. Daniel is the sole director and shareholder of a successful accountancy firm, while Helen is an employed senior law professional on a £100k+ salary. 

What did they need?

Emma had found an apartment in central London valued at £650,000 that would provide a long-term home while she continued to develop her career.

The family wanted Emma to be the sole owner of the property but her parents were happy to support the purchase through a Joint Borrower Sole Proprietor (JBSP) arrangement. This would allow their income and financial strength to be considered without them having an ownership interest in the home. 

Why were they facing challenges?

As a recent graduate, Emma's employment history was not sufficient to meet affordability requirements in isolation. The family also had a number of existing financial commitments that needed careful consideration. Daniel and Hannah had already supported their son through a separate JBSP mortgage and had an outstanding offset mortgage of £700k secured against their own family home which was worth £1.7m.

While they held savings of £500k and significant assets under management worth £2.25m, many lenders were struggling to take a holistic view of the family's overall financial position and future repayment strategy. The applicants wanted a solution that recognised their long-term wealth planning rather than relying solely on earned income.

How did we help?

Thanks to our manual underwriting approach, we were able to assess the wider financial picture and structure a solution that worked for all parties. When considering affordability, we looked not only at the parents' income but also 5% of their assets under management, taking into account their existing commitments, including their son's JBSP mortgage and their own household expenditure.

We were comfortable offering a 70% loan-to-value Joint Borrower Sole Proprietor mortgage on an interest only basis, with Emma as the sole proprietor and her parents acting as joint borrowers. A 15-year term helped create an affordable solution while aligning with the family's long-term financial plans.

For the eventual repayment of the loan, we took the family's substantial savings held within their offset arrangement into consideration - together with the potential equity available from one of their buy-to-let properties - rather than relying on the sale of the family home.

If you have a client looking for a Joint Borrower Sole Proprietor mortgage or a case that requires a more flexible underwriting approach, our Furness Intermediaries team may be able to help. Please contact us on 0800 988 1561 or speak to one of our Business Development Managers.