Joint borrower sole proprietor mortgage to avoid extra stamp?

Joint borrower sole proprietor mortgage to avoid extra stamp?

8:41 AM, 10th May 2016, About 6 years ago 4

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I have a property that I rent out on a consent to let basis with my bank due to it being in negative equity.avoid

I have lived with my girlfriend for around 18 months in her house and we would like to buy a house together.

As everyone is aware the SDLT has now kicked in and it would appear that I would be subject to pay the 3% on our new home. I have looked at options to try and save myself a lot of money and I have read up on joint borrower sole proprietor mortgage, but they are generally geared up for parents and children.

Given I am the bread winner my income needs to factor into a property purchase so this is the only option I can see available for me to avoid paying the 3% or owning my bank money by selling my house.

Does anyone know of any companies offering this mortgage type? I have heard Metro do but the Woolwich is only available as I mentioned earlier to parents.

Has anyone else been in this situation and tackled it differently?

Thanks in advance



by Neil Patterson

8:42 AM, 10th May 2016, About 6 years ago

Interesting question and I would like to know the answer so I will ask one of our IFAs 🙂

by Howard Reuben CeMap CeRER

9:55 AM, 10th May 2016, About 6 years ago

Ryan, you are right that the lenders usually require parents to stand as guarantors for their child's mortgage, although this proposition can sometimes be extended to grandparents, family members and spouses too. We can debate the rights and wrongs of this and why spouses are allowed and not unmarried partners, however these are the criteria rules that many of the banks have implemented and they usually won't sway.

If you and your girlfriend wish to explore the possible options with a professional mortgage broker, you can contact my team of independent mortgage Brokers via my profile link.

A Broker will then collect all of the relevant information that lenders require in order to determine if they will lend based on your current situation, circumstances and requirements. The eligible options will then be presented accordingly.

Hope that helps.

by Simon Bentley

15:12 PM, 10th May 2016, About 6 years ago

I assume you are selling your girlfriends house as part of the process of buying a new house.

If you are unable to find a suitable mortgage product, I wonder if you could "buy into" your girlfriends existing property on a short term basis, and declare that as your main residence. You'd still most likely be liable for SDLT on this purchase but I think only on a proportion (50% or perhaps less if you structure it accordingly) and then when you sell your girlfriends home and buy your new place you would be replacing your main residence and thus exempt from the new higher rates of SDLT. You would need to run the numbers on this to see if the extra legal costs etc make it viable and of course take appropriate professional advice.

by Ryan Brookes

9:33 AM, 11th May 2016, About 6 years ago

Thank you all for the feedback. Simon, your idea was particularly interesting and I have discussed this with the HMRC and it would indeed be possible, subject to the necessary legal procedures with being added to the deeds and agreeing it with the bank. The main sticking point here has been that I do not have a main residence to speak of as I am cohabiting with my girlfriend but once I am added to the deeds etc that would be classed as my main residence and there would be no additional fees incurred on the next property we purchase together. I anticipate that this method will have saved me in the region of £9,000.00.

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