A young first-time buyer wanted to move out of their family home but faced an affordability barrier due to traditional income multiples. We used a Joint Borrower Sole Proprietor (JBSP) mortgage to incorporate the father’s income without making him a co-owner, successfully securing a 91% LTV loan to get on the property ladder.
The Challenge
The client faced a few key hurdles in securing the required borrowing:
- Strict Income Multiples: The client’s income was below the typical 4 to 4.5 times salary threshold required by mainstream lenders.
- High LTV Requirement: The client had saved a 9% deposit on the £200,000 property, requiring a high LTV mortgage to cover the remainder.
- Affordability Constraints: Conventional mortgage options were out of reach on a single income, despite the client’s strong desire to move out.
The Strategy
To structure a deal that met the client’s needs, we explored specialist lending options and utilised a JBSP arrangement:
- Joint Borrower Sole Proprietor Structure: We used the father’s stable income to boost the borrowing capacity while ensuring he did not become a legal co-owner of the property.
- Extended Mortgage Term: We structured the borrowing over a 40-year term. Capitalising on the client’s youth ensured lower, more manageable monthly repayments.
- Favourable Rate Strategy: We secured a fixed interest rate of under 5% for the first five years, protecting the client against market fluctuations.
The Results
- Total Loan Amount: £182,000
- Loan-to-Value (LTV): 91%
- Deposit: 9% (£18,000)
- Mortgage Structure: JBSP Mortgage, 40-year term
- Key Outcome: The client successfully bypassed the affordability barrier and purchased their first home with affordable monthly outgoings.
Why This Matters
For first-time buyers stuck at home, inflexible income multiples do not mean the end of the home-buying dream. By using a JBSP structure, families can support the next generation’s purchasing power without giving up ownership stakes. While this specific case focused on a first home rather than the need to raise capital for property investment, our bespoke structuring ensures that all clients can secure property with competitive terms.
Speak to a Specialist
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