First time buyers may have access to a 100% mortgage, if their parents are willing to use their home as security.
https://www.beaconfinancialtraining.co.uk/wp-content/uploads/2020/06/cemap-online-and-classroom-training-uk.jpget Harborough Building Society has launched a new deal, which will make it possible for a first time buyer to borrow 100% of the property value, as long as the parents will permit a second mortgage to be secured against a property which they own. The ‘family assistance mortgage’ is suitable for those whose parents have a substantial amount of equity in their property. In order to qualify for the deal, the loan to value of both properties must not exceed 75%.
The deal is variable for the full term, and has a rate of 3.99%. The product has an arrangement fee of 1.5%, or a minimum amount of £1,250 to be paid. Although this can be added to the loan, it would increase the amount owed and the overall cost of the mortgage. A CeMAP qualified mortgage adviser would be able to help you decide whether the deal is suitable for your individual circumstances.
According to a spokesperson from the building society, the deal may be suitable for those parents who want to assist their children but don’t have a lump sum available to give them. A mortgage broker, David Hollingworth, stated that it was important for both parties to discuss what would happen if problems arose, as potentially, the parents could lose their home. There are other mortgage deals available, which rely on the assistance of parents, without risking their property.