It is increasingly popular for younger people to opt for a ‘Joint Borrower Sole Proprietor’ (JBSP) mortgages, which allow the income of family members – usually parents – to be taken into account, while the property title is held only in the child’s name.
Brokers in the Times and Financial Times said that inquiries had increased in recent months, and particularly since the stamp duty exemption for first-time buyers was announced in the November 2017 budget.
The exemption means that first-timers do not have to pay stamp duty on properties costing up to £300,000, or on the first £300,000 of properties worth up to £500,000. A joint purchase between a homeowner and a first-time buyer would usually mean missing out on this tax break, and could also result in the homeowner paying a 3% surcharge for owning a second home. JBSP mortgages avoid this.
Only a small number of our lenders currently offer mortgages on this basis but they are available, and criteria surrounding maximum lending age, so the age of the parent could limit the mortgage term considerably.
It is a fantastic way to get a step onto the property ladder for younger people, we’ve seen many brokers help first time buyers achieve their goal of getting their dream, flat or house.
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