Are you a homeowner and wishing to help your children or grandchildren onto the property ladder, but don’t have the cash available to do so? There could be a solution…
Family Assist schemes within the mortgage market are becoming more popular and readily available. Your son/daughter (or grandchild) could potentially obtain a 100% mortgage or put down only a very small deposit, to help them with that all-important step of purchasing their first home.
If you have a lot of equity in your own property, a second charge could be applied onto your equity, which would act as a security for their new property. So instead of otherwise gifting a deposit or releasing equity from your current property to give it away, this could be an alternative.
Not only that, your son/daughter (or grandchild) could take advantage of a discounted interest
rate in their first years of taking out the mortgage, setting them off to a solid start. Then once they have paid off enough of their mortgage, the second charge from your mortgage would be released.
No two circumstances are the same, but it is possible that the second charge could be in place for just a few years and wouldn’t be too long lasting.
| Here’s how it works… | |||||
| Purchase price or valuation, whichever is lower | Deposit | Mortgage % | Charge on parent’s property | Total security | Overall Loan To Value (LTV) |
| £200,000 | £0 | £200,000 | £50,000 | £250,000 | 80% |
| £200,000 | £10,000 | £190,000 | £37,500 | £237,500 | 80% |
| £200,000 | £20,000 | £180,000 | £25,000 | £225,000 | 80% |
Let’s discuss your requirements, contact a member of our friendly team today.