Case Study: JBSP Mortgage in Essex with Spousal Visa Challenge

Summary

We recently helped our customer secure a JBSP mortgage in Ilford, Essex to buy their first home for £370,000.

Although their credit history was good and they had no liabilities, the application had several points that needed careful consideration. The mortgage needed to work on a Joint Borrower Sole Proprietor basis, one of the applicants had a spousal visa, and the property had a single-skin extension.

We needed to find one lender whose criteria could accommodate all three points while also providing the £351,500 mortgage required. After reviewing the available options, we identified Skipton Building Society as a suitable lender and secured a 2-year fixed-rate mortgage for our customer.

The Scenario

Our customer was buying a house in Ilford, Essex as a first-time buyer.

Those involved in the mortgage were aged 30, 30 and 31 and were employed. Their credit history was good, with no liabilities recorded in the information provided.

The purchase price was £370,000 and our customer needed to borrow £351,500 over a 35-year term.

This meant the key figures were:

• Property value: £370,000
• Mortgage amount: £351,500
• Deposit: £18,500
• Loan-to-value: 95%
• Mortgage term: 35 years
• Mortgage type: Residential first-time buyer mortgage
• Credit history: Good

The income available was relatively low for the amount our customer needed to borrow, so a Joint Borrower Sole Proprietor mortgage, commonly known as a JBSP mortgage, was required.

The Challenge

There were three main issues that needed to work together.

Joint Borrower Sole Proprietor mortgage

A Joint Borrower Sole Proprietor mortgage allows more than one person to be included on the mortgage without everyone necessarily being named as an owner of the property.

This can be useful where additional income is needed to support mortgage affordability.

The challenge is that not every lender offers JBSP mortgages, and lenders that do offer them can have different rules about who can be included and how the application is assessed.

For this case, finding a lender that accepted JBSP was only the first part of the research.

Spousal visa

We also needed a lender that could accept an applicant with a spousal visa.

Visa status can affect mortgage criteria because different lenders have their own rules for applicants who do not have permanent residency.

This can become more important when the customer needs a mortgage at a higher loan-to-value.

In this case, the required mortgage of £351,500 against a £370,000 property meant the borrowing was at 95% loan-to-value.

We therefore needed a lender that could accept both the visa status and the level of borrowing required.

Single-skin extension

The final challenge involved the property itself.

The house had a single-skin extension. This generally means that part of the property has been constructed using a single layer of brickwork rather than a standard cavity wall.

Mortgage lenders have their own property requirements because the house provides security for the mortgage. Some property construction types can therefore reduce the number of lenders willing to consider an application.

This meant the lender needed to be comfortable not only with our customer’s financial circumstances, but also with the construction of the property they wanted to buy.

The lender ultimately needed to accept:

• A JBSP mortgage structure
• The applicant’s spousal visa
• A 95% loan-to-value mortgage
• The property’s single-skin extension
• The overall affordability of the application

Finding a lender that accepted just one or two of these points was not enough.

What We Did

We reviewed the application as a whole rather than looking at each issue separately.

The first step was to identify lenders that could offer a JBSP mortgage for a first-time buyer and provide the £351,500 our customer needed.

From there, we needed to narrow the options further.

We checked which lenders could consider the spousal visa at the required loan-to-value and which could also accept the property with its single-skin extension.

This was important because there would have been little benefit in choosing a lender that was comfortable with the customers themselves but would not accept the property.

Likewise, a lender that was happy with the construction of the house would not have been suitable if its visa or JBSP criteria did not fit.

By looking at all of these points before proceeding, we identified Skipton Building Society as a suitable lender whose criteria could accommodate the overall application.

The Solution

Skipton Building Society was able to consider the JBSP arrangement, the applicant’s spousal visa and the property’s single-skin extension, while providing the £351,500 mortgage required at 95% loan-to-value.

This allowed our customer to proceed with the mortgage amount required for the purchase.

The mortgage secured was:

• Purchase price: £370,000
• Mortgage amount: £351,500
• Loan-to-value: 95%
• Deposit: £18,500
• Mortgage term: 35 years
• Initial product: 2-year fixed rate

Why the Solution Worked

The lender we identified addressed each of the main challenges within the application.

In particular:

• JBSP was acceptable, allowing the mortgage to be structured in the way our customer needed.
• The spousal visa could be considered, rather than automatically preventing the application from proceeding.
• The required 95% loan-to-value was achievable based on the information provided.
• The single-skin extension was acceptable to the lender, meaning the property construction did not prevent the mortgage from proceeding.
• The £351,500 mortgage requirement could be met, allowing our customer to continue with the purchase.

The important part was finding a lender where all of these criteria worked together.

The Result

We successfully arranged the required £351,500 first-time buyer mortgage with Skipton Building Society, allowing our customer to proceed with the purchase of the £370,000 house in Ilford.

The mortgage was arranged over 35 years on a 2-year fixed rate.

Despite the combination of a JBSP requirement, spousal visa, 95% loan-to-value and single-skin extension, Skipton Building Society was able to accommodate the overall circumstances of the case.

Our customer was very happy with the outcome and was able to continue with their first home purchase.

What This Case Shows

This case shows why it can be important to look beyond the headline mortgage rate when an application has several different considerations.

A spousal visa, the need for a Joint Borrower Sole Proprietor mortgage, or an unusual part of a property’s construction does not necessarily mean a mortgage cannot be arranged. However, different lenders can treat each of these circumstances differently.

The key is finding a lender whose criteria work with the whole situation. A lender may accept a mortgage with a spousal visa but not offer JBSP, while another may offer JBSP but take a different view of the property construction.

For anyone in a similar position, having the right lender criteria can therefore be just as important as finding a suitable mortgage product.

Need Help with a JBSP First-Time Buyer Mortgage?

If you are looking for a first-time buyer mortgage and need a Joint Borrower Sole Proprietor mortgage, have a spousal visa or are buying a property with less standard construction, it may be worth reviewing the available lender options before applying.

Kerr & Watson can look at your circumstances, identify the points that may affect lender choice and explore suitable mortgage options based on what you are trying to achieve.

Contact Kerr & Watson to discuss your first-time buyer or JBSP mortgage requirements and find out what options may be available.