We often get asked how to get a mortgage without being the legal owner of the property.
There are many reasons why someone would want to do this, but it’s mainly for applicants who can’t afford a mortgage on their own.
With a joint borrower sole proprietor mortgage, an applicant with a low salary can receive support from a partner, family member or friend to jointly apply, without them being a registered legal owner of the property.
How is this different from a joint mortgage, joint ownership product?
With a joint borrower sole proprietor mortgage, only one applicant is named as the legal owner of the property, not both like with a joint mortgage joint ownership mortgage.
If you are the non-legal owner of the property, you won’t gain from any potential increase in value of the property.
What should I do if I want to take out this kind of mortgage?
The first thing you should do is draft a deed of trust between the legal owner and non-legal owner.
This will set out the intentions of both parties, and also set out what will happen should you be unable to make the repayments, or who would be liable if the deed of trust were to be breached.
A will for each other should also be drafted, to set out what would happen if one party were to pass away.
What happens if the non-legal owners want to leave the mortgage?
If you have a deed of trust with the non-legal owner, then there will be a clause allowing the non-legal owner to give notice with the intention to leave. This then gives the legal owner ten days to either agree to remortgage and remove the non-legal owner, or sell the property.
If there isn’t a deed of trust, the non-legal owner can leave by either; mutually agreeing to sell the property with the legal owner, obtaining a deed of release from their mortgage lender or by obtaining a court order.
Both the deed of release and the court order can be difficult to obtain depending on the circumstances.
For advice on getting a joint borrower sole proprietor mortgage, speak to one of our expert advisers who will be able to help you with the next steps.