First time buyers have hope thanks to new mortgage

July 22, 2017 by Brendan

Borrowers

A new type of mortgage has been introduced to the market designed to help first time buyers onto the property ladder.

Loughborough Building Society is just one lender which has introduced a new product, the first time buyer deposit mortgage. This was produced following research into the attitudes of first time buyers. The survey found that 85% of participants said that the biggest obstacle to buying a home was saving for the deposit. The new mortgage lets people make a mortgage application, even without a deposit, as family members are able to use their savings to fund the deposit, which is placed in an account linked to the mortgage.

Other lenders have introduced similar products, in order to help children obtain a mortgage. Although some parents or grandparents are able to provide a cash deposit to help their children secure a home, lenders now realise that many family members are still paying their own loans and don’t have spare cash. However, it is possible to help by acting as a guarantor for a mortgage, which uses their own home as security for the loan.

Offset mortgages are becoming increasingly popular, and there is one specially designed for family members to help their children to buy a home.

There are pros and cons to each type of mortgage, so they should be considered carefully before committing to help a child. Consulting a mortgage advisor who has knowledge of these products, thanks to studying on CeMAP training courses, will help you to decide the best course of action.