Lenders offering sole proprietor and joint application mortgages

by Aaron Strutt

May 03 2016

A limited number of mortgage lenders are offering sole proprietor and joint application mortgages, enabling parents to help their children onto the property ladder.

Two banks allow parents to use their income on the mortgage application without being named on the title deeds at Land Registry. The vast majority of lenders do not offer this.

Aaron Strutt, product manager at Trinity Financial, says: “Wealthier parents in their 50’s and 60’s are using this option to support the mortgage application to secure a larger loan.

“One of these bank's offers five-times joint income mortgages providing one of the applicants earns over £75,000, or they have a combined £100,000 salary.

“With any joint mortgage applications, both parties will be liable for the debt and if the mortgage is not paid on time both credit records will be affected.”

Mortgage terms

Both banks offering these mortgages link the terms to the parent's age, so if they are older it is likely to be limited to their 70th or 75th birthday. If they plan to work for longer or they have a good pension, this may be extended.

If parents have assets in the background, or buy-to-let income, it can often be used as a repayment vehicle to secure an interest-only mortgage. 

One bank will potentially lend past the stated maximum age if the parent receives a good pension income.

Other criteria

Clients can make overpayments and lower the mortgage to make it easier to refinance in a few years. The idea is that parents come off the mortgage once the child is earning enough money.

If the parent does go on the mortgage application but not on the deeds, some banks have said they will not have to pay the additional stamp duty. This may apply if they owned another property. You should confirm this with your solicitor or another financial adviser.

Call Trinity on 020 7016 0790 to secure a sole proprietor and joint application mortgage.