Guarantor Mortgages

A joint borrower sole proprietor mortgage is a modern mortgage option where both the borrower and a family member or friend are named on the mortgage application, but only the main borrower owns the property.

This setup allows the supporting person’s income to be considered in the affordability assessment, which can lead to a larger loan amount or more favourable terms.

Unlike guarantor mortgages, joint borrower sole proprietor mortgages involve the supporter more directly in the mortgage process, providing a clearer structure and peace of mind for lenders.

This is why many lenders now view joint borrower sole proprietor mortgages as the best option for those who need financial support to get on the property ladder, as it offers flexibility without compromising ownership of the home.

You should know that most lenders will require the supporting borrower to obtain independent legal advice to ensure they fully understand the commitments they’re making and the potential ramifications if they don’t meet those commitments.

It is important that you get mortgage advice on this subject and speak with a mortgage advisor before committing to any specific product.

Traditionally, a guarantor was usually a family member, such as a parent, who used their savings or property as security for the mortgage.

However, with the rise of joint borrower sole proprietor mortgages, lenders now prefer the supporting family member to be named on the mortgage application rather than acting solely as a guarantor.

This means their income is directly considered, providing more support for the borrower.

Guarantor mortgages were typically aimed at first time buyers or those with limited credit history who needed additional support to secure a mortgage.

Today, most lenders recommend a joint borrower sole proprietor mortgage instead, as it offers similar benefits.

This type of mortgage can be suitable for individuals who need a helping hand from family members in terms of income or affordability but still want to maintain sole ownership of the property.

With both a guarantor mortgage and a joint borrower sole proprietor mortgage, there are a handful of risks involved, both on the homeowners and the mortgage lender’s side.

The main risk to these types of mortgages is that if the borrower fails to make the mortgage payments, the supporting family member becomes responsible for covering the debt.

Both the borrower and supporting family member must be aware of these conditions before taking out a guarantor mortgage or a joint borrower sole proprietor mortgage.

This is a specialist subject and we always recommend speaking with a mortgage advisor before applying for any specific product.

Yes, guarantors have always been subject to credit checks to ensure they are financially stable and capable of taking on the risk.

With joint borrower sole proprietor mortgages, the supporting family member (joint borrower) is also thoroughly credit-checked and financially assessed.

Lenders need to confirm that they can manage the mortgage payments if required, providing more security for the loan.

In the case of a guarantor mortgage, if the guarantor couldn’t meet the payments, their assets could be at risk, including their property or savings.

With joint borrower sole proprietor mortgages, if the joint borrower cannot meet the payments either, it could lead to legal action and potential impact on their credit score.

Therefore, it is crucial for both parties to fully understand their responsibilities before entering into a mortgage arrangement.

While a guarantor mortgage could once help you secure a larger loan, lenders now prefer the joint borrower sole proprietor mortgage approach.

Having a joint borrower on the mortgage application means that their income is directly considered, which can indeed increase the loan amount you may be eligible for.

This makes the joint borrower sole proprietor mortgage option more appealing for those looking to maximize their borrowing potential with family support.