Teachers for Intermediaries, the specialist intermediary lending arm of Teachers Building Society, has launched its first Joint Borrower Sole Proprietor (JBSP) mortgage.
Rather than gift a one-off lump sum, the JBSP mortgage allows parents and grandparents to join their child or grandchild on a mortgage by including their income in the affordability assessment, increasing the overall amount that can be borrowed.
The older relatives then make regular monthly mortgage contributions alongside the younger relation but are not listed on the title deed as joint property owners, potentially avoiding the increased rates of stamp duty applied to second homes.
The Teachers for Intermediaries JBSP mortgage is available to first-time buyers from any profession via mortgage brokers.
Whilst up to four applicants can apply for the mortgage, the sole proprietor is eligible to take on the mortgage alone at a later date if their financial position allows it, for example due to career and salary advancement.
The JBSP mortgage is available to borrowers from other professions with more complicated financial scenarios, particularly surrounding their income.
Applications from wealthy parents and grandparents who would like to provide financial support but whose own finances are complicated, with income based on a range of assets rather than ‘standard’ employment, are also welcomed.
David Leek, head of product and marketing at Teachers Building Society, said: “We know it’s really hard for many first-time buyers to get on to the housing ladder.
“Whilst many parents and grandparents are keen to help their younger relations buy their first home, a lump sum gift towards a deposit won’t necessarily make enough difference to affordability for them to be able to purchase a home on a lower income or in a high value area.
“Even after years of saving first time buyers can find price rises have outstripped buying power in affluent areas, which buying earlier with support can help avoid.
“A JBSP mortgage enables family to help first time buyers by increasing the amount they can borrow, making a regular monthly contribution without being formal owners. In many cases, young borrowers progress professionally and are later able to meet affordability criteria alone.
“We’ve always focussed on helping young professionals buy their first homes and are delighted to be able to offer them another route to home ownership with our new product.”