A guarantor mortgage is a type of mortgage that requires a third party (typically a family member or friend) to act as a guarantor for the borrower. This means if the borrower is unable to make their mortgage repayments, the guarantor will be responsible for covering the payments.
Whilst this was a common offering from lenders in the past, there aren’t many options available these days. You may be able to find one or two from some smaller lenders, but they usually carry some caveats such as holding large cash savings with that lender or insisting on taking a charge over the guarantors property.
Given the benefit of guarantor mortgages, some lenders offer a similar option in the form of a JBSP mortgage.
What is a Joint Borrower Sole Proprietor Mortgage?
A joint borrower sole proprietor (JBSP) mortgage is a type of mortgage that allows two or more people to apply for a mortgage together, combining their incomes, but with only one person named as the sole owner of the property.
With a JBSP mortgage, all applicants are jointly responsible for repaying the mortgage, but only one person is listed on the property title as the legal owner. This arrangement can be useful for people who want to pool their incomes to increase their borrowing power, but who may not be able to or want to jointly own the property due to possible tax or legal reasons.
For example, parents may want to help their children get on the property ladder by jointly applying for a mortgage, but only the child will be named as the sole proprietor to avoid any potential future complications.
It’s important to note that all applicants will be credit checked and will need to meet the lender’s affordability criteria. Additionally, JBSP mortgages may not be available from all lenders, and the terms and conditions of these mortgages can vary, so it’s important to understand the details before applying for this type of mortgage. Which of course we can help with!
