SECURITY THROUGH PROPERTY - HOW IT WORKS
It’s a straightforward fact of life there are times when you won’t have money to spare, however much you may want to contribute. This is often the case for buyers and their families.
How can the Family Mortgage help?
Our answer: Security Through Property
You don’t necessarily need savings to help someone buy their first home. If a buyer has the 5% deposit, a family member can give a charge over some of the value in their own property.
By providing this security you lower the interest rate that the buyer might otherwise be able to get and so reduce their monthly payments.
Things to remember
Family members providing financial support should be aware that if the buyer is unable to meet the mortgage payments, the security they have provided is at risk if the property needs to be sold and there is a shortfall.
However during the first 10 years we do provide the buyer with important protection. Subject to certain conditions we'll meet the mortgage payments for up to six months should they become unemployed through no fault of their own, on a one-off basis.
You probably have a lot of questions abut how the Family Mortgage could work for you - we are here to help! If you're in a bit of a rush but would like to know more, you can complete a 'Four Quick Questions' form here.
A mortgage of £255,000 payable over 25 years initially on a fixed rate for 3 years at 2.69% and then on our variable Managed Mortgage Rate, currently 4.54%, for the remaining 22 years would require 38 monthly payments of £1,168.53 and 262 monthly payments of £1,392.80, plus one initial interest payment of £565.08.
The total amount payable would be £410,831.82 made up of the loan amount plus interest £154,957.82 and an application fee of £175, product fee of £599 and a mortgage exit fee of £100.
The overall cost for comparison is 4.2% APRC representative.