Help your kids get on the property ladder

Would you like to be able to help your children onto the property ladder, but don’t want to have to remortgage or lose your life savings to be able to achieve that?

Well, there may be an answer for you.

There is a mortgage product available from a select few lenders and is designed to help first time buyers, who have not managed to save the required 10% deposit which tends to be the minimum which is needed now.

With this mortgage, the applicant can have up to a 100% mortgage. The deposit comes in the form of a collateral charge being put on the parent’s property. The property does not have to be mortgage free to do this, you just need to have enough equity in your home, usually about 40% to qualify. The charge stays on the property until the equity in the mortgaged property increases to 20%. If a small deposit has been saved, this will be considered and a smaller charge will be placed on your property.

By helping your children this way, you do not have to use your savings or take out any loans and there is no monthly cost to you.

It is recommended that you do seek independent legal advice before agreeing to do this. As you need to be made aware of your obligations should the mortgaged property go into arrears or get repossessed.

Another option, is that you place enough savings to provide the deposit into a savings account with the lender, which then has to remain in that account either for a set amount of time, e.g., 5 years or until the equity in the mortgaged property has increased to 20%.

With these mortgages, the first-time buyer has the usual credit checks and income checks carried out and the home having the charge placed on it will have a valuation carried out on it.

Your property may be repossessed if you do not keep up repayments on a mortgage secured on it.

If you would like further information, please contact Hayley on 01245 806119 or email hayley@blackberry-mortgage-services.co.uk.

I look forward to hearing from you.