Discover how we helped our clients secure their first home together by navigating complex affordability challenges and structuring a Joint Borrower Sole Proprietor mortgage, giving them the confidence and support to make their dream move a reality.
At a Glance
- A couple, one already named on another mortgage, and the other a first-time buyer
- Needed to use a 90% LTV Joint Borrower, Sole Proprietor structure to retain first-time buyer Stamp Duty relief
- Successfully secured a fixed-rate mortgage despite complex affordability needs
The Case
Our clients were looking to purchase their first home together, a three-bedroom semi-detached property in North Wales. One applicant was a first-time buyer, while the other already owned a property jointly with a family member, which complicated their eligibility for first-time buyer benefits and impacted affordability. Seeking expert advice to navigate their unique situation and secure a mortgage that would allow them to move forward with their plans, they came to MFB for help.
Understandably, as one of our clients was technically a first-time buyer, they were keen to take advantage of Stamp Duty relief available to them. But, with one applicant already named on another mortgage, they faced challenges in funding both the deposit and Stamp Duty. They sought a lender that could accommodate their circumstances and offer a high loan-to-value product.
The Challenge
In order to try and retain the first-time buyer Stamp Duty relief, we decided a Joint Borrower, Sole Proprietor (JBSP) mortgage would be the best option. This would allow both clients to be named on the mortgage, but only one to be listed on the property title. Usually, this structure is used with a parent-child dynamic to help with affordability.
However, the lender needed to treat the application as a couple rather than family members and be comfortable with both applicants living in the property.
Affordability was a key consideration. The lender had to factor in the background mortgage and be willing to use earned income up to the age of 75. With limited funds available for both the deposit and Stamp Duty, the mortgage needed to be structured to maximise borrowing potential without compromising long-term financial stability.
To overcome these challenges, our consultant identified a lender with criteria aligned with the couple’s needs. By carefully assessing affordability and confirming acceptance of the background mortgage, they secured a product that allowed our clients to borrow 90% of the property’s value.
Our clients also sought legal advice to understand the implications of the JBSP arrangement, ensuring clarity on ownership rights and responsibilities. Our strong relationships with lenders and deep understanding of their criteria were vital in navigating this complex scenario and ultimately helping our clients secure their first home together.
The Finance
Property value: £225,000
Loan amount: £202,500
LTV: 90%
Rate: 4.80%* fixed for 5 years
Term: 33 years, Capital repayment
Monthly mortgage payment: £1,025.65
Lender arrangement fee: £1,295
*Rate as at November 2024
Next steps
If you’re looking to refinance a recently refurbished property or release equity for your next investment, get in touch with our team to see how we can help.
