Last reviewed on 4th September 2023 by Martin Alexander (Mortgage Advisor)
Often referred to as a JBSP mortgage, a joint borrower sole proprietor mortgage can help first-time buyers get on the property ladder. Homebuyers can get help in other ways, such as guarantors or gifted deposits, but a joint borrower sole proprietor mortgage works in a completely different way.
Maybe you can’t get a mortgage because of credit issues or your income may fall short for a mortgage. If so, a JBSP mortgage may be the answer to buying your own home. Furthermore, this can be a temporary arrangement until your finances are strong enough to get a regular mortgage.
This guide will explore JBSP mortgages and similar options that may also be suitable for getting help with a mortgage. You can also make an enquiry with our experts if you need further help.
- What is a Joint Borrower Sole Proprietor (JBSP) mortgage?
- How does a JBSP mortgage work?
- Is a joint mortgage different from a JBSP mortgage?
- How is a JBSP mortgage different from a guarantor mortgage?
- What are the pros and cons of a JBSP mortgage?
- Can I change to a different mortgage type?
- JBSP mortgage lenders
- What alternatives are there?
What is a Joint Borrower Sole Proprietor (JBSP) mortgage?
A joint borrower sole proprietor mortgage allows parents or family members to help pay a mortgage. This is ideal for situations where parents can offer help, without co-owning a property.
JBSP mortgages also offer flexibility. For instance, parents can contribute as much as they want each month. Once homeowners are able to repay the mortgage on their own, parents and family members can reduce contributions.
You can also benefit from getting a larger mortgage than you otherwise would. If you’re on a low income or want to borrow more than you’re able, a JBSP mortgage can allow you to do so. This is because lenders will assess income across multiple applicants rather than just your own. As a result, you can get a larger mortgage and keep sole ownership of the property.
Without getting help from an additional borrower, you may struggle to get the mortgage amount you require. In other words, you can reap the benefits of a joint mortgage application without sharing the ownership of your home.
How does a JBSP mortgage work?
Up to four applicants can apply for a JBSP mortgage on a single property. Each mortgage lender varies in its criteria, but typically, four applicants are the maximum for any joint mortgage. You can also apply with just one additional applicant. Lenders will then assess the incomes of each applicant to calculate the amount they’ll lend.
While most lenders require helpers to be family members, other lenders don’t have restrictions on who can be a non-proprietor.
Criteria and key features
- The homeowner must live on the property
- Non-proprietors can’t reside on the property
- Only the homeowner has ownership rights
- Non-proprietors have no ownership rights
- Gifted deposits may be accepted
- Repayment mortgages only
Can I take sole responsibility for my mortgage?
Yes, a JBSP mortgage is designed so that when you’re able, you can take sole responsibility for repaying your mortgage. The main aim is to help first-time buyers to get a mortgage while reducing a lender’s risk. Many first-time buyers simply don’t earn enough to get a suitable mortgage.
Once your income increases or you feel financially able, you can remortgage your home. Doing so will remove your family members from the mortgage. Furthermore, their legal responsibility of helping to pay the mortgage will also end. That being said, family members can reduce the amount they pay towards the mortgage at any time, as long as the mortgage is still paid in full.
Is a joint mortgage different from a JBSP mortgage?
Yes, a joint mortgage is different from a JBSP mortgage. A joint mortgage allows multiple applicants to buy a home and repay the mortgage together. This is common for couples, friends and even property investors. A joint mortgage also means that the liability of repaying the mortgage is shared. Furthermore, each joint applicant will be a legal owner of the property.
A JBSP mortgage is different in this way as those helping, such as parents will have a legal responsibility of repaying the mortgage, but won’t have any ownership rights. This can also save parents from having to pay additional 3% stamp duty charges for second properties.
How is a JBSP mortgage different from a guarantor mortgage?
Guarantors agree to cover mortgage arrears in cases where the mortgage isn’t repaid. Lenders also only lend on the basis that the applicant has a guarantor. This may be because of a shortcoming with the applicant’s assessment such as a small deposit or credit issue.
Similar to a JBSP mortgage, guarantors also won’t have any legal ownership of the property. The difference is that those helping, such as parents are required to contribute towards the payments immediately, rather than waiting for a debt to occur.
Learn more: What is a guarantor mortgage?
What are the pros and cons of a JBSP mortgage?
The main benefits of JBSP mortgages include:
- Easier for first-time buyers to get a mortgage
- Lowers risk for lenders
- Less chance of mortgage arrears
- Borrow more than you’d otherwise be able to
- Retain sole ownership while sharing liability
- No additional stamp duty for those helping
Trying to get your first mortgage can be difficult, especially with the increase in house prices. Saving a 5% deposit can sometimes be a struggle and even then, the rates on offer can be very high.
The average UK house price is currently around £286,000 (April 2023). So, a 5% deposit would be £14,300 based on this figure, which is quite an ask for most first-time buyers. With a JBSP mortgage, you’ll still need a deposit but you can receive help from family members. As you can borrow more with a joint application, you may be able to get a mortgage with a smaller deposit.
There are risks involved with JBSP mortgages, as there are with any mortgage or loan. There’s also a risk for your family members helping you, as they’re legally liable to pay the mortgage, even if you don’t.
Situations can also change and if relationships turn sour, payments towards the mortgage are likely to stop. It’s also not easy for family members to simply remove themselves from their legal obligations. If you’re unable to repay the mortgage by yourself because you no longer receive help, you could face losing your home.
Can I change to a different mortgage type?
Circumstances rarely stay the same, so having a plan in place is always advised. For instance, if you first take out a mortgage on a JBSP basis, but then want to share the mortgage with a partner, you’ll need to switch mortgage types.
A joint mortgage would be ideal, but you’d also be sharing the ownership with your other half. If you want to retain sole ownership, you may want to keep your mortgage on a JBSP arrangement but have your partner help you with paying the mortgage.
JBSP mortgage lenders
The number of lenders offering JBSP mortgages is limited. This is because it’s still classed as a specialist product which isn’t as common as other mortgages for first-time buyers.
Some lenders are also strict in their assessment process. For instance, they’ll only accept applicants over a certain age and with a good credit score. Those helping will also be assessed on their age. As a result, elderly helpers may struggle to find a suitable lender.
The good news is that well-presented applications can secure favourable deals with suitable lenders. Showcasing your income and income from those helping can give lenders confidence that the mortgage will be repaid on time each month. Larger deposits can also reduce the risk surrounding your application.
What alternatives are there?
As a first-time buyer, there are many ways for you to get help when buying your first home.
If you have family or friends willing to help you, you may benefit from the following mortgage types:
- Guarantor mortgage
- Gifted deposit mortgage
- Family mortgage
If you don’t have help, you can try the following government mortgage schemes:
- Shared ownership
- Mortgage guarantee scheme
It’s important to understand that each scheme or mortgage arrangement has its pros and cons. You can speak to our experts to learn about which mortgage arrangement will suit you the most.
About the author
Martin is a senior mortgage advisor and has held a CeMAP qualification for over 15 years while also completing an MBA in Global Banking & Finance.