A joint borrower sole proprietor (JBSP) mortgage is a great way for self-employed applicants to get on the housing ladder. With the financial support of family members, not only is it easier to secure a mortgage, but you can borrow more as well.
In this guide we'll explain what a JBSP mortgage is, how it works, typical use cases, the advantages and disadvantages and much more besides.
- What is a Joint Borrower Sole Proprietor Mortgage?
- How many incomes can be used for a JBSP mortgage?
- What are the benefits of a JBSP Mortgage for a self-employed applicant?
- What are the disadvantages of a JBSP mortgage?
- Are JBSP mortgages widely available?
- What additional stipulations are there for JBSP mortgages?
- How do I get a JBSP mortgage if I'm self-employed?
What is a Joint Borrower Sole Proprietor Mortgage?
With a JSPB mortgage, or a Joint Borrower Sole Owner (JBSO) mortgage as it's sometimes referred to, you take out a mortgage with one or more close family members. Your parents, for example.
Whilst each applicant is jointly responsible for the mortgage payments, only you own the property. The other borrowers have no legal claim over it.
Liability for payments
Because it's a joint mortgage, if a fall in your self-employed income meant you were unable to contribute to the monthly payment, the other borrowers would be individually liable to make good the shortfall.
Just like how each spouse in a marriage is jointly and severally liable for the mortgage payment.
In most cases, only the proprietors can reside in the purchase property, not the other joint borrowers.
Do I need to be a first-time buyer to get a JBSP mortgage?
No, not at all. Whilst JBSP mortgages are commonly used by first-time buyers to purchase a home, it's not usually a lender requirement. Having said that, a few providers restrict JBSP to first-time buyers only.
What use cases are there for a JBSP mortgage?
There are a few typical use cases...
- First-time buyers who don't have sufficient income themselves to purchase a home.
- Older borrowers who no longer have the financial means to continue paying the mortgage on their home
- Buying out a partner or spouse from the family home
- Buying a residential or BTL property with the help of a sibling or other close relative.
Who can apply as the joint borrowers with me?
With such a high degree of trust and commitment required, it's common for family members to be named as additional borrowers.
Some lenders only allow parents, but others are more flexible and also allow applications with siblings, aunts and uncles, nieces, nephews and other close relatives .
A tiny number of niche mortgage providers allow friends to be named as joint borrowers.
Whoever joins you on the mortgage, it's recommended that all borrowers get independent legal advice before applying. Some banks and building societies make it a mandatory requirement before they'll lend.
Can a couple get a joint borrower sole proprietor mortgage?
Yes. The Sole Proprietor part is a bit of a misnomer, as some lenders will allow 2 proprietors and two additional borrowers on the mortgage.
For married couples and partners struggling to borrow enough to buy their first property, a JBSO mortgage can be a great option.
How many incomes can be used for a JBSP mortgage?
Whilst it's possible for the income of up to four applicants to be used for affordability assessment, most banks and building societies only consider two or three.
For example, a young married couple and a parent could apply, with the two highest incomes, or possibly all three, being considered for affordability.