This is a guest post from Sharon Duckworth, Snr Mortgage Consultant (Key Mortgage Advice).
Now, more than ever, first-time buyers are struggling to raise a deposit and secure a mortgage.
Banks consider the level of borrowing required as unaffordable. This makes it especially difficult for single applicants or those in the early stages of their career.
Yet, the irony of this is that renting a home can generally be more expensive than making monthly mortgage payments.
So, What’s the Answer?
Young people looking to get a foothold on that first rung of the property ladder often need support.
A Joint Borrower, Sole Proprietorship (JBSP) Mortgage is ideal for those with family members willing to help. This type of mortgage takes into account the income of parents or siblings when assessing the case, but without the need to add them to the title deeds.
An added bonus of the JBSP mortgage is that the stamp duty is only based on the first time buyer. Any additional costs – and the dreaded second property stamp duty levy – are avoided by those who already own a property. There are also extra benefits in relation to potential Capital Gains Tax.
Once the customer is able to secure a mortgage without the help of their family member, they can remove them from the mortgage, without the costs associated with a transfer of equity.
Several of the main banks offer this option at the same rate as their everyday mortgages. In the face of rising UK property prices, a JBSP mortgage is a viable option for many families.