Parents can help you to purchase a property and for this you will need a joint owner sole proprietor mortgage. In some circumstances, this is the best option if you are struggling to get onto the property ladder.
With property prices on the rise in the UK, it is not surprising that so many first-time buyers turn to their parents for help.
In October 2020 found that more than half of first-time buyers under 35 bought a property with financial support from their parents.Legal & General
Getting help from your parents will mean that you might be able to afford a property when you otherwise wouldn’t. Alternatively, you could potentially afford a bigger property because your parent’s income is taken into account along with your own.
What is a joint owner sole proprietor mortgage?
This is when you take out a mortgage with your parents and you have joint responsibility for the mortgage repayments but only you will actually own the property. Agreeing this type of mortgage will still mean that all parties need to meet the lending criteria.
Joint owner sole proprietor mortgages are really there to help you with the mortgage payments temporarily until you can afford them by yourself. When the time the mortgage comes to an end and your early repayment charges no longer apply, you could be in a position to switch to a mortgage which is only in your name.
Joint owner sole proprietor mortgages are not offered by all lenders. These are usually smaller building societies including Barclays Bank, The Family Building Society, Metro Bank, and Clydesdale Bank to name a few.
What is the lending criteria for joint owner sole proprietor mortgages?
The lending criteria really depends on the individual mortgage lender.
- These mortgages are usually aimed at first-time buyers but you don’t always have to be a first-time buyer to take one out.
- They can be available for remortgaging as well as new purchases where affordability isn’t quite sufficient.
- Up to four people can take out the mortgage together and most require them to be family members.
- Only you the sole proprietor can live in the property.
- In some cases, these mortgages are available on interest only and repayment.
- The age of the oldest borrower will be used to decide the maximum mortgage term allowed.
- All parties involved in the mortgage application will have to take out independent legal advice to make sure they are fully aware of the implications.
If you would like any additional advice about joint owner sole proprietor mortgages, then please get in touch and we can arrange a meeting.
*Please note: Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.