Joint Mortgage Sole Proprietor Arrangement for £4.5 Million Flat

• Clients: Married couple refinancing their London home
• Property: London property valued at approximately £4.5 million
• Challenge: Reduced salary and limited bonus history meant the husband could no longer support the required borrowing alone
• Finance: Joint mortgage sole proprietor arrangement with the wife included on the mortgage but not the property deeds

I recently assisted a married couple who were looking to refinance their £4.5 million London home. The existing mortgage was held in the husband’s name, but their circumstances had changed since the original borrowing was arranged, meaning they needed to consider a different structure for the refinance.

The husband’s salary had reduced slightly, making it more difficult to demonstrate affordability for a mortgage of this size. He also had only one year of bonus history with his current employer. As lenders will often want to see a longer track record before relying heavily on bonus income, this further limited the number of lenders able to consider the application.

The couple therefore needed to use the wife’s income to strengthen the affordability assessment. However, she did not want to be added to the property deeds, meaning a conventional joint mortgage was not suitable for their circumstances. There were also additional complexities around her income, as she was a partner in a law firm and therefore had a less straightforward income structure than a salaried employee.

I considered the available options and identified a lender that could offer a joint mortgage sole proprietor arrangement. This structure would allow the wife’s income to be taken into consideration for affordability while keeping ownership of the property in the husband’s name.

I presented both clients’ financial positions to the lender in detail. The husband’s strong career history provided additional context around his bonus income, while I worked to present the wife’s partnership income clearly so that the lender could properly understand the underlying financial position.

The lender also had a flexible approach to underwriting more complex applications, which was particularly valuable in this case. My established relationship with the lender and its underwriter allowed me to discuss the application throughout the process and address questions as they arose.

The resulting facility was a two-year fixed-rate mortgage at 1.59% at the time. The joint mortgage sole proprietor structure allowed the couple to use both incomes for the mortgage application while maintaining the ownership arrangement they wanted, subject to the relevant legal and tax considerations.

The case demonstrates how a joint mortgage sole proprietor arrangement can provide a useful solution where one applicant’s income is needed for affordability but they do not wish to be a legal owner of the property. As with any specialist mortgage structure, the suitability and tax implications should be considered based on the individual circumstances.

Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, underwriting, affordability, property suitability and lender criteria. Terms, rates, LTVs and availability may vary depending on individual circumstances. The legal and tax treatment of a joint mortgage sole proprietor arrangement will depend on the specific circumstances and should be confirmed with appropriately qualified professional advisers.

Risk Warning:
Your property may be repossessed if you do not keep up repayments on your mortgage or other borrowing secured against it. Property values can fall as well as rise. Interest rates and affordability requirements can change over time, and borrowers should ensure they have a suitable plan for maintaining mortgage repayments.