Industry News: Struggling with mortgage affordability?

Skipton Building Society

Income Booster

“Income Booster, also known as Joint Borrower, Sole Proprietor (JBSP), allows your clients to add up to 3 extra people to a mortgage, without making them a legal owner of the property. We factor in incomes from all applicants, which could allow your client” Click to read original article >>>

Skipton Building Society “Income Booster” product revised

How does this help mortgage affordability?

What was once considered a guarantor mortgage, and now commonly known as Joint Borrower, Sole Proprietor (JBSP) mortgages has further been rebranded by many lenders an an “Income Booster” mortgage, designed to help with mortgage affordability. The basic premise is the same with some slight differences in execution. What makes Skipton’s recent revision of this product interesting is that there’s no restriction on who can join you on a mortgage application.

If you are not already aware of this mortgage type it works like this:

  • Typically parents or siblings can join you on the mortgage, with their incomes increasing the borrowing amount and improving mortgage affordability.
  • The property is owned solely in your name however, meaning that they don’t have the added expense of second home stamp duty, and you don’t lose the first time buyer allowance.
  • Extra borrowers not on the title do not need to reside at the property as their main residence

There are some caveats however and the most significant of these is the fact that the maximum term will be limited by the oldest applicant. This means that if a donor is 60 years old on their next birthday, you might only be able to take a ten year term, driving up the repayments significantly and impacting both the overall affordability from the lenders perspective  and the amount you could afford monthly.

What are the facts?

Skipton opening the doors to anyone helps significantly with this. Here are the key bullet points:

  • We will accept up to four applicants and up to all four incomes.
  • There are no restrictions around the relationship between the main borrower and the supporting borrower (known as the non-proprietor).
  • The main borrower(s) (proprietor) must reside in the property.
  • We will accept 100% of maintenance received and child tax credits as income.
  • The maximum LTV is 95% (subject to usual criteria).
  • Available on any repayment method (subject to lending criteria). Please note: If on interest only the non-proprietor’s residence cannot be the repayment vehicle.
  • The maximum term will be based on the oldest income-providing applicant.
  • We will accept up to 20% site exposure in any development.
  • We won’t charge for valuing the property for mortgage purposes where the property is valued at less than £1.5 million.
  • 9+3 month offer validity period for New Build properties (6 months otherwise).
  • Priority underwriting for New Build purchases, with a 48 hour turnaround time for initial underwrite.
  • We have products offering our Remortgage Conveyancing Service.
  • Available across the whole of England, Wales and Scotland.
  • Any product can be selected from our core residential range, including products with cashback and remortgage products that include the fee assisted conveyancing service.
  • Independent legal advice is required for all non-proprietors (not living in the property).
  • Not available for Second Home purchase, Discounted or Family Purchases or Buy To Let and not acceptable in conjunction with any other lending schemes e.g. Shared Ownership.
  • Remortgage capital raising is acceptable, subject to standard lending policy – additional monies must be for the proprietor’s sole and full benefit. The exception to this is where the monies are being used to buy out the non-proprietor’s share if currently on the title.
  • Normal age and lending into retirement rules apply. We may allow the supporting borrower to go to age 80 if the occupying borrower covers 70% of the total loan request. The maximum term will be based on the oldest income-providing applicant.

If you would like to enquire, or think this could help you contact AALTO Mortgage for a completely free and zero obligation chat with one of our experienced mortgage brokers who will be happy to spend some time explaining how this could work for you.

Picture of Author: Stuart Phillips

Author: Stuart Phillips

Fully CeMap qualified, Directly Authorised by the FCA and with over a decade of experience, Stuart has a wealth of experience in both specialist BTL and residential mortgages.

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