If you have big plans to buy your first home or move up the property ladder, but your income isn’t stretching far enough to afford a mortgage on your own, a Joint Borrower, Sole Proprietor mortgage could be an option for you to consider if you have parents or close family members who want to help. This type of mortgage allows up to three additional people to support your mortgage application and increase your affordability, without them having any legal ownership over the property you buy.

With help from our trusted partners at the New Homes Mortgage Helpline we explain everything you need to know about Joint Borrower, Sole Proprietor mortgages so you can understand how they work, and whether one might be right for you.

Your guide to Joint Borrower, Sole Proprietor mortgages

How does a Joint Borrower, Sole Proprietor mortgage work and what does it mean?

With a Joint Borrower, Sole Proprietor mortgage, you can name up to three additional people on your mortgage application, however only you will be the legal owner of the property – the ‘sole proprietor'. Your joint borrowers could be parents, close family members, or even trusted friends.

The joint applicant(s) on your mortgage will combine their income with yours so that you can borrow more to buy the home you want. The other applicants will be named on your mortgage, but not on the property deeds, and they won’t have any legal rights over your property; however, you’ll all be jointly responsible for the mortgage repayments which means that if you can’t afford to pay, they will have to.

Is a Joint Borrower, Sole Proprietor mortgage suitable for me?

A Joint Borrower, Sole Proprietor mortgage could be right for you if you need to boost your mortgage affordability, whether because it would be a struggle to make the mortgage repayments on your own, or you want to borrow a bit more to buy your perfect property.

These types of mortgages are especially great for solo first-time buyers who have parents or close family members that want to help them buy a home, but who don’t want to be legally responsible for the property itself.

Self-employed people, or those with a variable income may also choose a Joint Borrower, Sole Proprietor mortgage to give the lender confidence that the mortgage repayments will always be covered.

You’ll still need to save for a deposit towards a Joint Borrower, Sole Proprietor mortgage; if you’re fortunate to have a gifted mortgage deposit, you should be able to use this too, subject to your individual lender’s requirements.

What are the benefits of a Joint Borrower, Sole Proprietor mortgage?

The key benefits of choosing a Joint Borrower, Sole Proprietor mortgage include:

• Increased borrowing power – The mortgage lender takes the income of all applicants into account, so you can borrow more to buy a home.
• Stamp Duty relief – If you’re a first-time buyer, you’ll still be eligible for Stamp Duty relief as the sole proprietor.
• Full legal home ownership – The property you’re buying is legally yours, and the joint mortgage applicants won’t appear anywhere on its title deeds.
• Family financial support – Your parents, grandparents, or even siblings (or close friends) can financially support you with buying a home without them taking on legal ownership of another property.

Are there any risks to a Joint Borrower, Sole Proprietor mortgage?

Before taking out a Joint Borrower, Sole Proprietor mortgage, there are a few things to consider, including potential risks:

• Everyone is responsible – All borrowers named on the mortgage application are jointly and equally responsible for making the mortgage repayments, so if you can’t pay, they will have to cover them for you.
• It goes on their credit file – The supporting borrowers will have the mortgage on their credit file, which could impact their ability to borrow elsewhere.
• Not offered by all lenders – Only certain lenders offer a Joint Borrower, Sole Proprietor mortgage, so it’s useful to work with a broker like the New Homes Mortgage Helpline who are familiar with the ones that do.
• Borrowers may need legal advice – Some mortgage lenders may require the non-owning parties to seek independent legal advice before committing to joint borrowing.

What are the alternatives to using a Joint Borrower, Sole Proprietor mortgage?

If a Joint Borrower, Sole Proprietor mortgage isn’t quite right for your circumstances, there are other options you can consider, such as:

• Gifted deposit – If a close family member would like to help you financially with buying a home, they might prefer to give you a sum of money towards your mortgage deposit, which could mean you need to borrow less and improve your affordability. Read our guide to gifted deposits to help you understand how they work.
• Guarantor mortgage – Similar to a Joint Borrower, Sole Proprietor mortgage, a guarantor mortgage requires a close relative or friend to cover your mortgage repayments if you’re unable to pay for any reason, however their existing property or savings are used as ‘security’. Speak to an independent mortgage advisor for more information and advice about guarantor mortgages and whether one could be a good option for you.
• 100% mortgages – Saving for a deposit can be incredibly difficult for first-time buyers, and there are zero-deposit 100% mortgages available that enable you to borrow the full value of the home you want to buy, as well as Track Record 100% mortgages that are designed to help renters get onto the property ladder.
• Affordable buying schemes – If you’re thinking of buying a new-build home, you may have access to affordable buying schemes to help you secure your dream property with a low deposit. Speak to your sales advisor at your preferred Bellway development to find out more about schemes such as Deposit Unlock, the low-mortgage solution for new-build homes.

Joint Borrower, Sole Proprietor mortgages: Other frequently asked questions

Are Joint Borrower, Sole Proprietor mortgages only for first-time buyers?

No, any type of home buyer could apply for a Joint Borrower, Sole Proprietor mortgage if they need to boost their affordability and have eligible family members or friends that are willing to support their mortgage application. However, these mortgages are particularly well-suited to first-time buyers on a limited income who need a helping hand to afford their repayments.

Which banks offer Joint Borrower, Sole Proprietor mortgages?

There are many major high street banks and building societies currently offering Joint Borrower, Sole Proprietor mortgages, or their own versions. One of the benefits of working with an independent mortgage advisor, or a new-build home mortgage specialist such as the New Homes Mortgage Helpline, is that you’ll be able to access the entire mortgage market and the best products and deals currently available, with financial advice tailored to your circumstances.

Do I need a deposit for a Joint Borrower, Sole Proprietor mortgage?

Yes, you will need to save for a deposit before applying for a Joint Borrower, Sole Proprietor mortgage, and the amount you need to save will depend on the value of the home you want to buy and the mortgage terms set by your lender. Many will require just 5% deposit, but others may ask for 10% or higher.

Do all of the borrowers have to live in the purchased property?

No, which is one of the biggest advantages to taking out a Joint Borrower, Sole Proprietor mortgage. The supporting borrower(s) doesn’t have to live in the property that is purchased, which is why this type of mortgage can be a useful option for parents who want to help their child to buy their own home.

Will I still be eligible for first-time buyer Stamp Duty relief with a Joint Borrower, Sole Proprietor mortgage?

Yes, because your supporting borrowers won’t have any legal ownership of the property. This protects your status as a first-time buyer and your eligibility for Stamp Duty relief on the property you’re buying, up to the threshold of £300,000.

Can I remove the joint borrower from the mortgage at a later date?

Yes, you can remove your joint borrower(s) from your mortgage in the future. Once your income is high enough to afford the mortgage repayments on your own, or if your circumstances change, you may be able to do one of the following:

• Remortgage the property into your name only
• Transfer the mortgage and legal title
• Release the supporting borrower(s) from the loan

If you’d like to learn more about Joint Borrower, Sole Proprietor mortgages and whether one could a good option for you, speak to an independent mortgage advisor for qualified and impartial advice that’s tailored to your circumstances. If you’re purchasing a brand-new home, the New Homes Mortgage Helpline can provide you with specific advice on the most suitable mortgages for new-build homes so that you understand all of the options that are available to you.

For more helpful information and guidance on buying a new-build home, visit the Bellway website to read about the great reasons to buy new, or to explore our first-time buyer hub to support your journey towards stepping onto the property ladder. Then search for your nearest development of dream new homes by Bellway, and explore the buying schemes and incentives available to make your perfect property even more affordable.