Sole proprietor joint mortgage for mother and son

THE SCENARIO

Securing a loan on a sole proprietor joint mortgage basis is often a challenge, but when additional complications are added into the mix, this becomes more difficult still.

I was recently approached by two non-UK nationals living overseas; my clients were a mother and son, who planned to be on the mortgage together. My clients were looking to refinance two investment properties in London in order to extend their current mortgage term and raise money for a future investment property. The properties were previously in the mother’s name, however she now wanted to bring her son onto the mortgage in order to use his salary for affordability.

The two properties in question were located in South London, and were both valued at £750,000.

The primary issue is that neither clients were UK nationals, nor did they live in the country, so I needed to find a lender who was comfortable with this. For tax reasons, the son did not want to go onto the title deeds, but rather just the mortgage deeds.

Finally, the mother was in her late sixties, so this was a further complication. We therefore needed a lender who was not only comfortable with non-residents, but also with a primary applicant who was retired and approaching the upper age limit of when most lenders would lend to. As a final complication, the son was also self-employed, so this considerably narrowed down who we could approach.

OUR SOLUTION

Fortunately, I have an excellent relationship with a very holistic lender who approaches every case on an individual basis. I knew this would a good port of call, due to the complexities of the case involved. To compensate for their non-resident status, we highlighted the mother’s clear history of successfully paying a UK mortgage. My clients were European, so this was a surmountable barrier.

We also ensured the lender could offer on a sole proprietor joint mortgage basis, so the son could be on the mortgage but not the title deeds of the property requested. We compensated for the mother’s age (she would be 84 at the end of the term) by highlighting that the son would still be young enough to use the full extent of his income for the whole term of the mortgage.

Finally, we were able to obtain a full three years’ of audited accounts for the son’s business, highlighting his increasing profitability year on year. Due to the success of the business, the lender was comfortable using this income to support the case.

This lender is a small lender, but they have an excellent attitude of taking a view on difficult circumstances. My close relationship with an underwriter at this lender meant I was able to find a successful resolution for this case, securing my client a 1% Discounted Variable Rate (4.49%) for an 18-year term.

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