New 100% mortgages available with help from family

According to statistics, over half of first time buyers in the UK are only able to afford to buy a home with the help they receive from their parents and other family members.

The Council of Mortgage Lenders stated that in 2009, just 30% of first time buyers were able to get onto the property ladder without help from their family. Although that figure had improved by 2014 to 48%, it was mainly due to assistance from the new Help to Buy schemes available.

Barclays is now offering a mortgage which doesn’t require a deposit, and the bank is even willing to lend 5.5 times the income amount if the borrower earns £50,000 or more. This is the first 100% mortgage to be offered since 2008, but it does appear to have a catch.

As the buyers don’t have a deposit, a ‘helper’ is required to open a savings account with Barclays which is linked to the mortgage account. The amount placed in the account must equate to 10% of the purchase price.

If the mortgage payments remain up to date for three years, the ‘helper’ then gets the money back, along with the appropriate interest. The ‘helper’ is generally the parents of the borrower, and although it may seem as though all parties are winners, it is possible for the ‘helper’ to lose their investment, especially if house prices stabilise.

As with all house purchases, there is some risk attached, which is why the advice of a CeMAP qualified mortgage adviser should be sought.



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