JBSP Mortgages Explained

What is a Joint Borrower Sole Proprietor (JBSP) mortgage?

A Joint Borrower Sole Proprietor Mortgage (often referred to as a JBSP mortgage) is where the mortgage is in joint names but only one of the parties is on the deeds to the property. Having additional parties on the mortgage can help secure a bigger mortgage and possibly a cheaper interest rate, without the need for them to be a legal owner of the property.

JBSP mortgages are often used by parents (or other family members) to contribute to their son or daughter’s mortgage without being co-owners. It can be a great way for parents to help their children get on the property ladder and is a good alternative to a gifted deposit or acting as a guarantor. However, there are some consequences that need to be carefully considered and there may be a better option for a parent to help out their children.

A JBSP mortgage is not restricted to a parent helping out their child and up to four people can usually apply for a JBSP mortgage. Both Residential and Buy to Let mortgages can be secured on a JBSP basis.

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How does a JBSP mortgage work?

JBSP mortgages are regular mortgages with the additional feature of being able to add parties onto the mortgage who are not on the property deeds. Because of this additional feature, those banks that offer JBSP mortgages are likely to have additional rules regarding who is eligible, how much can be borrowed, and how affordability is calculated.

But the mortgage itself performs in the same way as a regular mortgage: a loan is taken out, secured against the property with those party to the mortgage being responsible for paying back the loan and repayments usually being made monthly.

When a lender is assessing applications for a mortgage they look at the finances of all the applicants to determine how much they can responsibly borrow. Including more applicants onto the mortgage allows the use of the additional finances which means the lender can offer a larger mortgage. This

There is also a Stanmp Duty benefit to

There are other important consequences;

Why would I use a JBSP

With house prices rising considerably in popular areas such as Bristol and London it is getting harder and harder for first-time buyers to afford their first home. Parents who want to help their children but do not want to give them money as a deposit can use a JBSP mortgage to help increase the borrowing avaialbe or help them secure a lower rate

Buy to let….

Benefits of a JBSP mortgage

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A JBSP mortgage is a huge commitment for the person who is not the legal owner. They are legally liable for the mortgage repayments but have no rights to the property and make no financial gain from it. If you stop making your mortgage repayments, for example, the other person named on the mortgage must pay your share.26 Feb 2021

Are JBSP mortgages for BTL as well ?

Yes, JBSP mortgages can be used for Buy to Let as well as residential. They work in the same way by allowing extra borrowers onto the mortgage but not onto the title deeds.

How do I get a JBSP mortgage?

Not all banks offer a JBSP and the ones that do each have a different set of criteria on who they will accept and how much they will lend.

A mortgage broker can be useful to not only help you find a lender that offers JBSP mortgages but also find which of all the lenders is the right one for you and your situation (which usually means who will offer the mortgage you want at the lowest cost).

Whats the difference between a JSBP mortgage and a Joint Mortgage

A joint mortgage is one where two or more people borrow money to buy a house together, and it is usually couples, friends, or relatives. Everyone on the mortgage is liable for the entire mortgage and the payments, so if one party doesn’t pay then it falls to the others to make the payments or face default. Importantly, all those on the joint mortgage have a legal claim to ownership of the property.

With a JBSP mortgage, the other person (typically the parent) accepts joint responsibility for making mortgage payments but has no legal claim to the property.

The difference in ownership is the important difference between a joint mortgage and a JBSP mortgage. Both deals allow parents and children to club together to get a mortgage. However, with the JPSB only the son or daughter’s name will be on the property’s deeds, meaning the parent will be able to avoid any stamp duty surcharge but also that they will have no legal right to the property despite the fact they are taking on the same risk as those who are.

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