Suffolk Building Society has announced that one of its family support mortgages will now be available to family members to provide financial support in a variety of scenarios including divorce and retirement.
The lender’s joint borrower-sole proprietorship (JBSP) mortgage allows up to four people from two different households to borrow, but only one or two people are named on the property’s title deeds.
This type of mortgage has been associated with until now first-time buyers who need support from family members to get on the property ladder. The JBSP mortgage means they can have a parent or other family member named on the mortgage, but that person will not be a named owner of the home, meaning they won’t pay any additional taxes.
But thanks to Suffolk’s new improvement, this type of mortgage offers a potential solution for people who need support at different stages of life.
The building society explained that it could also help parents who want to support a child going through divorce or family breakdown, by taking over the mortgage on their family home or buying out a spouse.
Likewise, children may choose to support their parents financially by being named as borrowers on a mortgage, helping mom and dad stay in their family home.
In addition to residential mortgages, the building society is also accepting applications from buy-to-let, holiday let and ex-pat buy-to-let customers for its JBSP deal.
Charlotte Grimshaw, head of intermediary relations and mortgage sales at Suffolk Building Society, said: “We are always looking to support first-time buyers and those entering the property ladder, but we also believe that the sole proprietorship with a joint borrower has many other applications which ensure that it is an attractive feature for families in different circumstances.
“Family is important and where possible family members want to help each other. By launching JBSP, we support this societal norm and provide a new means for generations to pool resources in a way that goes beyond ‘donate’ money.
“We know that house prices continue to rise well above average incomes and that is affecting many people, not just those who are new to home ownership.
“If couples separate, this could mean, for example, that someone suddenly has to finance a mortgage with one salary. A co-borrowing sole proprietorship could be just the solution to enable family members to support that person to continue living in the family home or buy something new.
“In addition to our manual underwriting and flexible criteria, we believe our joint sole proprietorship offering for borrowers will help more people own their homes as they face changing circumstances. We look forward to seeing how different families take advantage of this new feature.”
The borrowers must all be immediate family, such as parents, grandparents, son, daughter, brother or sister, and can also include stepfamilies and adoptive families.
You can obtain more information about this product from your mortgage advisor.