Family Assist Mortgages
Taking the first step on the property ladder is often out of reach for most young people due to the substantial deposits required.
Lenders continually change their deposit requirements, and less well-known banks could be in a position to help, therefore you may be eligible.
to learn more about Family Assist Mortgages
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
Measures are being taken to help overcome the obstacles to homeownership, and many of the major banks and building societies now offer a Family Assist Mortgage, or a Family Offset Mortgage, which can help an individual to become a homeowner by allowing a member of their family to act as a guarantor.
This works by allowing a person to take out a mortgage of 95% upwards, while a parent or other close family member pays 20 to 25% of the deposit into a held savings account.
With a Family Assist Mortgage, the relative will put their money into an account, which will then be linked to the family member’s mortgage account. The amount deposited into a savings account will remain there for a period of time and will be locked in so that it cannot be spent; if all of the mortgage payments have been made, then the money will be returned to the family member that loaned the money.
If a family member doesn’t have a lump sum of money that they can use as a loan to help their children out with a mortgage, or if a parent does not want a sum of money secured on their home, then there are other ways that a Family Assist Mortgage can be structured. These options include A co-ownership arrangement. This is where a second property can be purchased, which can then be used by other family members.
Lower interest rates
The main advantages of a Family Assist Mortgage are the lower interest rates, and a family member won’t have to give up the savings that they might have been putting away for their retirement.
Benefits of a Family Assist Mortgage
Some banks and building societies have an upper age of limit of 70-75 of the guarantor and the buyer must be able to provide evidence that they can cover the monthly payments.
Further Information
A Family Assist Mortgage is a complicated process so it is essential to get independent advice before entering into any agreements. For independent advice on how a Family Assist Mortgage can help you or a family member to get on to the property ladder, call 01844 390910 and speak to a Bright Money advisor.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
How to proceed
When you speak to us early in your house buying process we will be in a better position to proceed once you find your new home.
It would be helpful to have some figures to hand:
- your income
- any savings
- your outgoings
- how much you’re looking to spend.
We suggest getting an Experian Credit Report to ensure you have a good credit history, especially with a high loan-to-value mortgage.
We will then compare and source the most suitable deals for you by searching the whole of market with the aim of saving you time and money.
With our main office in Thame, our brokers are located all over the Home Counties so we’re never far from providing the help you need.
FAQs
for
Family
Assist
Mortgages
What is a family assist mortgage?
A family assist mortgage is a type of home loan that allows a family member, often a parent, to support a buyer by using their savings, income, or property as additional security. This support can help improve affordability or reduce the deposit required.
How do family assist mortgages work?
Family assist mortgages work by involving a family member in the application. The support may be provided through a savings account, a charge over property, or a guarantee arrangement, depending on the lender and product type.
Who can act as a family supporter on a family assist mortgage?
Most lenders allow close family members such as parents or grandparents to act as supporters. Criteria varies by lender, and supporters must usually meet age, income, and credit requirements.
Do family assist mortgages require a deposit?
Some family assist mortgages allow buyers to purchase with a smaller deposit or, in some cases, no deposit at all. This depends on the lender and the level of support provided by the family member.
Is the family member responsible for the mortgage?
In many family assist arrangements, the family member may become jointly liable for the mortgage or provide security that could be at risk if repayments are not maintained. The exact responsibility depends on how the mortgage is structured.
How long is the family support required for?
Family support is often required for a fixed period, such as the first few years of the mortgage. Once the borrower meets certain conditions, the supporter may be released from the arrangement, subject to lender approval.
Does a family assist mortgage affect the supporter’s borrowing ability?
Yes. Because the supporter is involved in the mortgage or has provided security, the commitment may be taken into account when they apply for borrowing of their own.
Are family assist mortgages regulated?
Yes. Family assist mortgages are regulated by the Financial Conduct Authority, and lenders must assess affordability and suitability for all parties involved.
What are the risks of a family assist mortgage?
Risks include potential financial exposure for the supporting family member if the borrower cannot maintain repayments. It’s important that all parties understand the implications before proceeding.
What alternatives are there to family assist mortgages?
Alternatives include Joint Borrower Sole Proprietor mortgages, gifted deposits, or saving for a larger deposit. Each option has different legal and financial implications.
Are family assist mortgages suitable for first-time buyers?
Family assist mortgages are commonly used by first-time buyers who need help meeting affordability or deposit requirements. Suitability depends on individual circumstances and family willingness to provide support.
