Joint borrower sole proprietor mortgage - any advice on pros and cons

[Snozzlemaid]

Dd is interested in getting on the property ladder as soon as she can. She is currently on a 20 contract with an average of 15 hours overtime every week.
She has a healthy deposit saved up and is looking at a modest property. However, the amount she is being advised she can borrow is about £30,000 below what she would realistically need because a high portion of her income is overtime.
If I had plenty in savings to help her with this, I wouldn’t hesitate to do so, but it would wipe out a big portion and I would then wish to help ds the same.

I have been reading up on JBSP mortgages and feel this is a way I could help her. DP and I own our house outright so have no mortgage or rent and I work full time. So my income would help her to be in a position to borrow enough.

As far as I can see she would still be classed as a first time buyer so she could get her help-to-buy bonus and wouldn’t be required to pay stamp duty. The only downfall would be the length of the mortgage would be shorter as I’m 54.

We have done a budget plan and she could afford to pay the mortgage on her own and would remortgage as soon as she can on her own to remove me. So there won’t be any financial burden on me unless she loses her job for example so I know I would then need to help make the monthly payments.

It feels like a great way to help her to get started and we’ve been looking at the offer Nat West have for this product.

I’m aware I will need to get legal advice as part of the agreement but does anyone have experience of doing this?
What are the bad points or things I should consider carefully.
Thank you

We've done this with DD1 with Barclays. She's at uni and has lodgers to help cover the mortgage costs. (My parents did the same for me.) We can afford to cover the payments (with some belt tightening) if she has issues getting more lodgers next year. But it makes sense to us - why pay rent when she could be building up equity (& reducing her car insurance as a side effect.)

Those who have done this, how long a mortgage did you manage to get and what age were you as the parent?
I’m 54 and wondered if we would only get offered to my retirement age of 67. Which would obviously increase monthly payments.

My DH is older. We only managed to get 24 year deal. Even that took us past his retirement age. They wanted our pension info at that stage!

I think I’ll advise DS to take a 25 year mortgage when he takes it on, on his own. He’ll be 23 then. He’s already reached 85% LTV. He has lodgers who cover the mortgage amount.

I think I’ll need to go it alone for our DD and might only be able to get 18 years. Trying to save a bigger deposit for her to compensate.

Dd has about 18% deposit already so is in a really good position as far as that goes.
Can I ask if you used a mortgage advisor or if you went directly to one of the banks that offer this?

We went to London and Country. It was a very, very stressful process. It was before NatWest relaunched their offer. Ours is quite specialist because 3 names as joint, 1 sole owner. Sole owner is a student. Happy with the interest rate. Had to make sure we had independent legal advice. All sorts of things to consider and sign. Took longer than it needed to. Thought DH might have a heart attack over the stress! Once arranged and process complete has been plain sailing.

Thank you for the honest insight into the process

I used a mortgage advisor (not for a loan like this but initially fora specific product and then to refinance). They know so many products and can shop around to get you a good rate. I've used the same people to refinace and they saved me 1,000 a month when I did that.

I can't remember if we went to a mortgage broker (DH did it) but probably. He was 58 & we got a 16 year term. I think it was about £150 for the independent legal advice.
Edited for typo

Fantastic. That’s really good to know. Thank you. Dd is contacting her mortgage advisor to start looking into this as an option.

I did a similar thing with my son. We did a Barclays Family Springboard Mortgage. Basically, I had to lock away 10% of the mortgage balance for 5 years as a buffer.

Purchase Price £175,200
Deposit £15,200 (paid by parents)
Mortgage taken in sons name only £160,000 (£800pm repayments)
£16,000 placed in a Helper Account for 5 years, in my name.

Me and sons Dad are divorced. We each put in £7,600 to make up the £15,200 deposit. I then put £16,000 into a separate account in my name that is linked to the mortgage as an additional buffer. I will get that back in 5 years, and with interest on top (at 5.28%), I will actually get back £20k+

Obviously this did mean I had to part with £23,600, which I know you're not keen to do, but as I will get back £20k+ in 2031, I was ok with that. You say you want to help your other child - I guess if your other child is much younger, then you could do the above, as you'd get your lump sum back and could use it again for them.

And just to add, Barclays were fantastic!

Thank you @Blondiebeachbabe
Ds is older and is also looking to buy soon as well. He has the advantage though of buying with his girlfriend so no affordability issues for them thankfully.

Good luck with it! It's been such a relief to see son settled in his own place!

Thank you. Dd has had her offer accepted so we are now proceeding with this plan. I’m happy I can support her in this way to get her foot on the ladder.