Arranging a joint mortgage for a sole proprietor can be challenging, particularly when the borrowers are based overseas and have different income and ownership requirements. I recently assisted a mother and son who were both non-UK nationals living overseas and wanted to refinance two investment properties in London.
The properties, both located in South London, were each valued at £750,000. The clients wanted to extend their existing mortgage term while also raising additional capital towards a future investment property.
The properties were already held in the mother’s name, but she wanted to add her son to the mortgage so that his income could be considered for affordability. The son did not want to be added to the property title for tax reasons, meaning the structure needed to allow him to be jointly liable for the mortgage without becoming a registered owner.
The clients’ overseas residency created another consideration, as they needed a lender comfortable with UK mortgages for non-residents. The mother was also in her late sixties and approaching the upper age limits applied by many lenders, while the son was self-employed, further narrowing the available options.
OUR SOLUTION
Fortunately, I had an established relationship with a lender that takes a more individual approach to complex applications. I presented the clients’ circumstances in detail, including the mother’s established history of successfully maintaining a UK mortgage and the fact that the clients were European nationals.
The lender was able to consider the proposed sole proprietor joint mortgage structure, allowing the son to be named on the mortgage while remaining off the property title. This meant his income could contribute to affordability without changing the intended ownership structure.
We also addressed the mother’s age by demonstrating that the son would remain within an appropriate age range throughout the mortgage term, allowing his income to be considered for the duration of the borrowing.
Finally, I obtained three years of audited accounts for the son’s business, demonstrating consistent growth and increasing profitability. This provided the lender with a clear picture of his financial position and gave them confidence in the sustainability of his income.
The lender ultimately agreed to the proposed structure over an 18-year term. This case demonstrates how access to specialist lenders can be particularly valuable for international borrowers where age, self-employed income and ownership requirements need to be considered together.
It also highlights the importance of finding a lender prepared to assess the application as a whole rather than applying standard criteria to each individual element.
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.
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.
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Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
