Blog Archives

Joint borrower sole proprietor mortgages set for take-off in 2018

26.01.2018

It may not be the catchiest of names but if you haven’t yet heard of a joint borrower, sole proprietor (JBSP) mortgage, chances are this year you will. The JBSP mortgage has been around ever since first-time buyers struggled to purchase property on their own and had to turn to their parents to help, combining two deposits and incomes.

But they really started to grow in popularity from April 2016 when a 3 per cent stamp duty surcharge on second homes was introduced. Suddenly, parents buying homes with their children found they had to pay an extra 3 per cent stamp duty on top because they owned another property, even though their child was a first-time buyer. The JBSP mortgage got round this by allowing two incomes to be taken into account for mortgage purposes but with only the child’s name going on the property deeds so there was no extra stamp duty to pay.

However, demand for JBSP mortgages has really taken off since last November when the Chancellor announced in his Budget that first-time buyers would not pay any stamp duty on properties costing up to £300,000 (or the first £300,000 of a £500,000 property in more expensive locations such as London). Once again, a first-time buyer purchasing with someone who is not a first-time buyer, such as a parent, would otherwise miss out on this tax break but the JBSP mortgage gets round this in a completely legitimate way.

Since the beginning of this month we’ve noticed a steady increase in enquiries from people looking for the solution of a JBSP mortgage. This increased demand is resulting in more lenders coming into this market, so rates are increasingly competitive, which is great news for borrowers. We expect this situation to only improve so do get in touch for more information.

Adrian Anderson
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Adrian Anderson

Lending options increase for self-employed borrowers

19.01.2018

The self-employed can find it harder to get a mortgage than those in employment because lenders don’t really understand their income streams or they are new to their self-employed career so don’t have much of a track record of earnings.

However, some lenders are becoming more sensitive to self-employed borrowers and their needs. Newcastle Intermediaries, which lends via mortgage brokers, this week launched an attractive two-year fixed-rate deal pegged at 2.2 per cent, on mortgages up to 60 per cent loan-to-value. There are no reservation or completion fees and a free standard valuation, further keeping initial costs down.

Another funding option for self-employed borrowers, of which we deal with a growing number, is extremely welcome, particularly as Newcastle will look at applications from those who have been trading for less than two years. Applying individual case assessments to these borrowers is a sensible move as one self-employed client is very different from another and one size does not fit all.

Jonathan Harris
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Jonathan Harris

Lenders herald new year with rate cuts

08.01.2018

The January sales haven’t just hit the high street as a number of lenders have reduced their mortgage pricing in the past few days. Barclays launched a two-year fix pegged at 1.28 per cent with £999 fee for borrowers requiring a maximum loan-to-value (LTV) of 50 per cent, while the lender also reduced a number of other fixed-rate deals, including a two-year fix pegged at 1.65 per cent for those borrowing 85 per cent LTV.

Meanwhile, Yorkshire Building Society has launched a market-leading five-year fix pegged at 2.03 per cent for those borrowing 85 per cent LTV, with a £995 fee. Accord has launched some discounted standard variable rates while Leeds Building Society has added some new mortgages with £1,000 cutback to its Help to Buy range.

Despite a quarter-point increase in Bank of England base rate in November, mortgage deals show no sign of getting more expensive, which is great news for borrowers. With £28 billion of mortgages expected to mature in the first half of this year, according to Virgin Money, lenders are keen to lend and attract some of that business with some tempting deals. This is great news for borrowers, who should seek advice from an independent mortgage broker to ensure they get the right deal for their circumstances.

Adrian Anderson
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Adrian Anderson