Mortgage Product of the Month- The family mortgage - 95% LTV mortgage
Caz Blake-Symes • October 22, 2020
Introducing the Family Mortgage
At the moment the number of mortgage products available through all lending sources has dropped dramatically. However, as fully independent Mortgage Brokers, we are constantly evaluating the market looking for the best products available.
We have chosen this exceptional product this month to highlight to our clients offering excellent opportunities for families to be able to support First-time Buyers onto the property ladder with only a 5% deposit! This product is the Family Mortgage.
The principle behind the Family Mortgage is simple.
It helps families help family members take the first step on the property ladder. As long as you have at least a 5% deposit (which can be wholly gifted), and you have family that can give the lender additional security by using their savings or having a charge on their own property, the lender may be able to help.
Family members can help you by:
1. Putting their savings in Family Security Account, which earns them interest too
2. Providing a charge over some of the value in the property, so there is no need for them to use their savings
3. Placing their savings in a Family Offset Account at the start of the mortgage. This reduces the amount of the mortgage on which we charge interest by the amount held in that account. This means family members will not earn any interest on savings in the Family Offset Account.
The additional security family members provide will need to bring the total security we have (your deposit and the help from your family members in one or more of the ways we list above) up to 25% of the property value.
What next?
You probably have a lot of questions about how the Family Mortgage could work for you - we are here to help! The benefit of using Bristol, Bath or Exeter Mortgages Online is that your supported from the very first meeting through to completion by our excellent administration team.
There are various calculations that can be made regarding the Family Mortgage and one of our experts Mortgage Advisers will gladly give you a full illustration showing the calculations for all those involved.
Things to consider
We know there is lots of things to think about with a Family Mortgage and getting some help from your family to buy a home. It is important both you and family members understand that by offering security for your mortgage with their savings or by placing a charge on their property, family members are responsible for making up any shortfall if you sell your house for less than the mortgage value, which is known as negative equity.
Working with family members helps buyers:
- get lower interest rates, meaning lower monthly payments
- pay interest on a smaller amount of the mortgage, meaning lower monthly payments
- increase your buying power when choosing a property to buy.
- put assets to work for the buyer as security for the mortgage
- help the next generation own their own home without giving the money as a gift
Here at Bristol, Bath and Exeter Mortgages Online, we believe that this is a truly excellent product. However, it needs to be fully considered by all family parties involved. Therefore, we suggest that you book an appointment to discuss your specific requirements in detail, including a full illustration by Phil, Paul or Chris to ensure that this product is right for you.
For further details about the service we offer as a fully independent mortgage brokers or any other mortgage information book your FREE CONSULTATION with one of our expert Mortgage Advisers please contact us
Bristol Mortgages Online www.bristolmortgagesonline.com
Tel 0117 325 1511
Bath Mortgages Online www.bathmortgagesonline.com
Tel 01225 584 888
Exeter Mortgages Online www.exetermortgagesonline.com
Tel 01392 690 888
Email info@swmortgages.com
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