Family Boosts
Family support options including Joint Borrower Sole Proprietor mortgages.
If your client can access family support to increase the amount they can borrow, there are several options available.
Four incomes, four applicants
If your client is buying a home with friends or family, they can apply with up to 3 other people. We’ll consider all their incomes. They must all live in the property they are buying.
Gifted deposits
An immediate family member is defined as a spouse, mother, father, brother, sister, child, grandparent, grandchild or legal guardian.
Gifted Equity
Gifted equity is when the applicant is buying the property for less than it is worth. Your client uses the gifted equity as the source of deposit.
Actual value of the property £280,000
Buying the property for £230,000
An immediate family member is defined as a spouse, mother, father, brother, sister, child, grandparent, grandchild or legal guardian.
The property price on the application and for stamp duty is £280,000.
Joint borrower sole proprietor (JBSP)
With a JBSP, your client can apply with up to 4 family members and combine the income of all the applicants. We’ll take their income into account when working out how much your client can borrow.
By doing this the family member agrees to pay the repayments if your client can’t meet them (a bit like a guarantor mortgage). But, unlike a guarantor mortgage, they aren't offering their own property or savings up as security against the loan.
A JBSP mortgage is a temporary affordability boost to get your client on the ladder. In the future, their financial circumstances may change. If their salary goes up or, once they've paid off a significant part of the mortgage, they may feel ready to fully take on the mortgage themselves.
A family member can be a parent, grandparent, child, grandchild, sibling, spouse or legal guardian. They can’t live in the property being bought.
Your client’s family member won't own any part of the home your client is buying; it’s completely in your client’s name. And they won't need to pay Stamp Duty or Land Transaction Tax.
To make a JBSP mortgage application, you must complete
- the Joint Borrower Sole Proprietor Ownership details; and
- before completion, a Certificate of Independent Legal Advice
If a family member is providing the purchase deposit, you may also need to complete a Waiver Form.
Case Study
Find out how, with support from her family, we helped Rhian take a step on the property ladder.
Frequently asked questions
Household expenditure for both the borrower and the sponsor will need to be inputted for the affordability calculation.
You don’t need to input the sponsors’ mortgage debt in the initial affordability calculation but, in order to take account of it, the remaining mortgage debt of joint borrowers must be subtracted from the results.
Example:
Sponsors’ outstanding mortgage is £152,000,mortgage applied for is £150000. Affordability will need to cover £152k and 150k = £302k plus.
The sponsors’ mortgage balance does not need to be added to expenditure.
These mortgages are only available for purchases and capital repayment.
Any non-owning borrower will need to get independent legal advice.
Each non-owning party will need to provide a completed Certificate of Independent Legal Advice before the mortgage is completed and the funds are released.
Need more information?
Take a look at our lending criteria or JBSP for customers.
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