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How to protect your family from falling out

How many ways can a family fall out?

That’s probably a question best levelled at Jeremy Kyle or one of the other doyens of daytime TV to whom family strife is grist in the mill. But it is a fair bet that the reason most families fall out is the lurking prospect of Mammon.
Money, as the old song has it, makes the world go around. Image of young man and elderly man posing for a photograph

Yet it is also the source of so much anxiety, especially in this world where families are under so much pressure to get a foot on the housing ladder. Decades of house price rises, rising rents, increased mortgage market regulation and a continuing shortage of affordable homes, has only served to increase the pressure on the under 35s to get their first home. New stats out today, unsurprisingly, show home ownership falling.

Anxious parents, especially those with some liquid wealth, understandably want to help out their children and often lend them the money for that all-too-unobtainable deposit. But what if circumstances change, or the worst happens and a critical illness hits the family and the parents need the money back. It’s a perfect recipe for family friction.

We understand money, but we also understand families. That’s why we created  a range of family friendly mortgages that enable family members to use their assets, such as their own home equity, to help first time buyers into their first home.  So, rather than gift or loan savings that may be needed in an uncertain future, family members can let their relatives enjoy the benefits of the gains they have made in their own property without worrying whether they need their money back quickly.  

Other lenders have tried to crack this nut, like Barclays for example, but their Springboard mortgage only allows cash deposits to offset the capital sum lent to the first time buyer. What happens if the borrower, through no fault of their own, loses their job?  As their website helpfully explains, you should get legal advice (as, indeed you should with any mortgage you take on): “Two important issues they’ll explain fully to you concern what happens if the property buyer can no longer make their mortgage repayments. If that happens, we’ll keep the money the helper deposits in the Helpful Start Account”. 

Sometimes bad things happen and people lose their job through no fault of their own. We understand that because that’s real life.  So, during the first 10 years of the Family Mortgage we provide the borrower with important protection by automatically meeting the buyer’s mortgage payments for up to six months on a one-off basis should they become unemployed through no fault of their own.

So while others make headlines, the Family Building Society carries on making mortgages which genuinely help the family.

You can read all about them here. So not only do you get to help out with the next generation, it is fall-out proof too.

By Steve McDowell

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Family Building Society
Ebbisham House
30 Church Street
Epsom
Surrey KT17 4NL
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