14 Apr 2023
Times are hard at the moment and we appreciate that the increase of the cost of living, coupled with increasing house prices, may make it seem impossible for you to get on the property ladder. We all know how hard it is to be able to save the deposit and borrow the mortgage, but there are options out there making it easier for first time buyers and home movers (only some lenders) to ‘boost’ their borrowing amount by adding another income onto the mortgage application.
There are more lenders now offering Joint Borrower Sole Proprietor mortgages, meaning another applicant can be added to the mortgage to help with affordability. This means another income will be included within the calculations, which often results in more borrowing. The difference with this product is that the ‘additional applicant’ will not become a part owner of the property meaning it will not cost them extra stamp duty etc as part of the process.
This product is designed for first time buyers looking to get on the ladder, but are unable to get the mortgage amount they require. Lenders will look at the affordability based on up to 4 incomes, however all other expenses will be taken into consideration which could in turn work against you. For example if the additional applicant has their own mortgage, the full payment will need to be factored in for affordability, along with general living costs and other debt payments they have.
The additional applicants will be required to get ‘Independent Legal Advice’ to ensure they understand the consequences of being part of the new mortgage. Ultimately they will be equally liable for the mortgage payment and also need to be aware that this mortgage payment will show on their credit record so could work against them for any future mortgages or financial needs. This is almost like what was once known as a ‘Guarantor Mortgage’. The mortgage lender will undertake exactly the same checks as any other mortgage application, such as credit checks and reviewing income documents.
The products on offer can be applied for with as little as 5% deposit and most lenders don’t offer any different interest rates for applying for this type of mortgage.
So if you are struggling to borrow enough to purchase your first home, or the home of your dreams then this product could be the answer.
Get in touch today with the team to discuss further.