Product of the week: joint mortgage, sole proprietor for residential & buy to let

The housing market has seen significant changes over the last 15-16 years; increasing regulation and taxation, plus a vast amount of capital growth. This has had a direct effect on how individuals, companies and trusts own property, as either a main residence or investment.

However, rising house prices have made it difficult for first time buyers to own a home, with those trying to save deposits while paying high rents now generally unable to buy their first property until approximately their mid-thirties. Equally, aspiring property investors or landlords are now required to build a deposit of 20% to 25%, proving a significant amount when added to the extra 3% stamp duty tax if it is the buyers second property.

With these concerns in mind, many applicants are struggling to find creative solutions to get onto the property ladder or invest in property, yet there is still a selection of lenders offering innovative products and solutions to help.

One of which is a joint mortgage, sole proprietor ownership product from a lender that we have an excellent relationship with. This means the lender can use the income of two applicants when calculating affordability, with the legal ownership only designated to one of them.

Buy to let 2 year fixed joint mortgage, sole proprietor ownership

This lender is currently offering a two year fixed joint mortgage, sole proprietor ownership option for buy to let purchases and remortgages, and will even allow up to three applicants on one mortgage (but will only take the two highest earners into account).

The cheapest product they are offering within this is a two year fixed rate up to 65% loan to value, which comes with an extremely competitive rate of just 1.89%. They also offer a 1.85% two year buy to let tracker product (1.6% plus the 0.25% Bank of England base rate).

A particular benefit of this is that it allows both parents and their child to be on a mortgage if their child is unable to borrow the amount needed to purchase on their own. If the parents also own a property they would usually be subject to the additional 3% stamp duty, however in this instance, the child would be the sole legal owner of the property with no stamp duty to pay.

This is also applicable to buy to lets, as the majority of lenders require you to own a property to have access to their products, even if it’s a residential. This undoubtedly limits the options for first time buyers or landlords greatly, which is where our product of the week comes in! Allowing both parties of the joint mortgage to benefit from having no additional stamp duty tax to pay.

This further emphasises the many ways that parents can help their children with property purchases in the current market, be it from gifting deposits or helping with affordability assessments, yet still avoid the impact of additional taxation on their own situation.

If that wasn’t all, this particular product comes with a rental calculation of 145% time 5.5%, which is an excellent deal for properties that already have good rental yields.

If you have any questions about this product or the market in general, or if this is of interest to you, please do not hesitate to get in touch where one of our experts brokers can help.

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