Is Joint Borrower, Sole Proprietor Mortgage Right For Me?

CheeseandWine

If I enter a joint borrower, sole proprietor mortgage (as the second borrower/non-proprietor) will this affect my borrowing capability when I buy a property myself in a few years time?

Some background if you want extra info:
My brother has been living at home with my parents since he graduated nearly two years ago in order to save money for deposit on a house. He now earns a reasonable salary (30-35k) and has saved just shy of 20k (my dad is willing to match anything he saves). Unfortunately, we live and work in the South East commuter belt and property is expensive. He would never be lent enough money based on his salary alone. My dad suggested we get a joint mortgage but I stumbled upon joint borrower, sole proprietor mortgages and think this is a better fit.

I graduated from uni in July and have started working already. I should be earning around 30k this year and as my work has fixed pay scales, my income should rise annually for the next few years. Combining our salaries would mean he would be lent enough to buy a reasonable property in about 6 months time. With a sole proprietor mortgage it will also leave me as a first time buyer when I come to buy a property so avoiding stamp duty. (I am also living at home and hoping to buy a flat within the next year to year and a half). I appreciate that I would have no interest in the property legally but would still be liable to pay the mortgage if my brother does not. However, not having interest in the property does not bother me (I see this more as a helping hand to my brother) and I doubt my brother would ever be in a situation where he could not pay the mortgage. If that situation did arise I suspect my dad would probably step in rather than me.

I believe my dad's reluctance to be the second borrower is due to him owning a few other properties (i.e. a few other mortgages) and the bank may not look favourably on him potentially over leveraging himself.

I am happy with this plan in general but I am worried that being liable for my brother's mortgage may mean banks will be reluctant to lend to me/ reduce my borrowing potential when I come to buy. Would anyone be able to clarify this for me?

TrickyDicky101

You will be jointly liable for the whole of the mortgage debt so the short answer is yes it will impact your future borrowing capacity.

LRmortgage

You will have to declare this (it will show on your credit file too) as a mortgage / liability and any new mortgage will effectively be treated as a second mortgage and affordability will need to be met on both for you to be able to get a place for yourself.

Whilst it!!!8217;s nice that you want to help out, I don!!!8217;t think this will be helpful to yourself!