Restructuring A Purchase Using A Jbsp Solution

The Clients

The applicants were initially two borrowers purchasing a residential property together. However, part way through the transaction one of the applicants was no longer able to proceed, placing the purchase at risk.

The remaining applicant still wished to continue but could not meet affordability requirements alone.

The Challenge

The primary challenge was maintaining the purchase without changing the intended ownership of the property.

A relative was willing to assist financially, however a standard joint mortgage was not appropriate as the property needed to remain solely in the occupying applicant’s name.

Introducing a supporting borrower also created an additional complication, as lender criteria limited the available mortgage term. The shorter term significantly increased the monthly payments and made the mortgage unaffordable under a traditional repayment structure.

Without restructuring, the clients were likely to lose the property.

The Solution

Following detailed discussions, we arranged a Joint Borrower Sole Proprietor (JBSP) mortgage. This allowed the initial borrower to remain the sole owner and occupier, while a family member joined the mortgage purely to support affordability.

To address the affordability pressures created by the restricted term, we structured the mortgage on a part-and-part basis, combining repayment and interest-only borrowing. This reduced the monthly commitment to a sustainable level while still ensuring capital reduction over time.

The clients also had access to an unencumbered property, which was evidenced as an acceptable repayment vehicle for the interest-only element. This ensured the structure met lender criteria and remained suitable and compliant.

Mortgage Details

Property value: £450,000

Loan amount: £360,000 (80% LTV)

Term: 21 years

Rate: 4.19%

Monthly payment: approx. £2,166

Structure: Part repayment / part interest-only

The Outcome

The purchase proceeded without altering the intended ownership of the property, allowing the occupying borrower to buy and live in the home while receiving affordability support from a family member.

By restructuring the borrowing rather than withdrawing from the transaction, the clients avoided losing the property and secured a mortgage that was both affordable and appropriate for their long-term plans.

This case demonstrates how flexible structuring particularly JBSP arrangements supported by suitable repayment planning can provide a viable solution where a standard residential application would otherwise not be possible.