There are various first time buyer mortgage schemes currently available to those wishing to buy their first property.
Yet, despite government initiatives and 95% mortgages becoming more commonplace, the reality is that for a large swathe of the UK’s first time buying population, purchasing a home is still cost-prohibitive.
In fact, it’s often so cost prohibitive that the well-documented ‘Bank of Mum and Dad’ is called on now more than ever before (although as a Guildford mortgage broker, we can say that parents’ financial input is increasingly common regardless of mortgage type).
In days gone by, getting a guarantor mortgage in the UK, where parents could effectively underwrite their children’s mortgage, was a pretty straightforward affair. There was plenty of choice when it came to applying for a guarantor mortgage and the mortgage itself was common.
These days, guarantor mortgages are only provided by a handful of lenders. So, whilst it does exist, it’s very much a fringe product. The good news, however, is that in its place is a new type of mortgage – the Joint Borrower, Sole Proprietor (JBSP) mortgage.
What is a JBSP mortgage?
Let’s think of it as a guarantor mortgage 2.0, but in this instance, multiple named borrowers (up to four or more, in fact) can be attached to a mortgage on a property in which only one of the borrowers is named on the property’s title deeds.
As a first time buyer, this means that you get to own the property, but multiple people are contractually obliged to make mortgage repayments.
The beauty of this arrangement, of course, is that a large combined income drives up affordability levels and borrowing possibilities. The result? Buying a property becomes much more accessible to those who, when going it alone, maybe wouldn’t qualify for a mortgage.
From the first time buyer’s perspective, as they begin to earn more, then the option of becoming the sole named person on the mortgage is possible at the point of remortgaging (depending on their income).
From the lender’s perspective, it’s a safer bet; instead of relying on the assets of parents, which is how guarantor mortgages are structured, everyone named on the mortgage shares a monthly obligation to make repayments.
Guarantor mortgage or JBSP mortgage?
For those absolutely wedded to the idea of applying for a guarantor mortgage, then our team of Guildford mortgage advisers can access the very limited number of guarantor mortgage products that remain available.
However, as a JBSP mortgage specialist, we would advise all of our clients who are looking to get a mortgage with help from parents to at least consider a JBSP mortgage.
Why not contact the Complete Mortgages team to explore your options, and discuss the difference between guarantor mortgages and JBSP mortgages, using the details below.
Need assistance with arranging a JBSP mortgage? Contact our team of Surrey mortgage advisers by calling 01483 238280 or e-mailing info@complete-mortgages.co.uk.
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