Do I have a ‘Joint Borrower, Sole Proprietor’ mortgage?
If one of the borrowers of the mortgage loan will not also be one of the owners of the property being mortgaged, then yes.
The most common Joint Borrower, Sole Proprietor (JBSP) situation is where a parent is helping their child buy their first home by joining in with the mortgage yet will not be named on the title deeds. But there other reasons, such as where:
- one of the borrowers who already owns a property, agrees not to go on the deeds of the property so as to avoid the 3% stamp duty surcharge which arises on purchases of second/additional properties
- someone who is at risk of business-related debts, whilst still being jointly responsible for the mortgage payments, wants to put their home into a partner’s name, therefore keeping the property out of reach of creditors of the business
Why does Independent Legal Advice need to be sought?
In a JBSP mortgage, the individual(s) listed on the mortgage who will have no legal title to the property take a great risk in becoming liable for the repayment of the mortgage. From the lender’s perspective, it must ensure any party who does not benefit directly from the loan understands the full extent of their liability before the mortgage commences. As there is such high risk for the person signing the mortgage, such as their own personal solvency, yet without having the benefit of co-owning the property, the mortgage lender considers it must take proactive measures to prevent the joint borrower in question claiming in the future they were not fully aware of the terms and financial implications of the mortgage.
That’s where ILA comes in. In order to adhere to their duty of care, lenders want to ensure the relevant parties to a JBSP mortgage have full awareness of their personal liability, especially as they are not benefiting directly from the loan. By obtaining ILA, the mortgage lender gains protection from such claims, while the borrower benefits from the advice of a qualified solicitor before entering into an agreement.
How can I obtain Independent Legal Advice?
If your lender has asked for ILA to be obtained for your Joint Borrower Sole Proprietor mortgage,. then fortunately, we’ve made it easy for you to get ILA no matter how complex your situation. At ILA-Connect, we work with law firms nationwide who understand and deliver the necessary independent legal advice you need. Get in touch with us via email on firstname.lastname@example.org or call our office on 0333 300 1879 to book an appointment.
If you know the product you need and the details surrounding your situation, just click to get a quote.
Once you have submitted your details, we will provide you with a bespoke quote for ILA. If you are happy to proceed, we will set up an appointment with a qualified solicitor in your local area who offers this service. All you need to do is attend for the meeting!