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The perfect family Valentine – A mortgage deposit

A Valentine is not just for lovers, it is also about love, reconciliation and about family.

Valentine Image blogThe Feast of St Valentine, as it was known before it was hijacked by the greetings card industry is observed across the world and in many cultures and religions. Originally, for early Christians in the Roman Empire, St Valentine was celebrated as a martyr who healed the daughter of his jailer just before his execution – it was about love for fellow man. Later the medieval author Geoffrey Chaucer first associated the festival with romantic love and the Valentine’s Day we now know was born.

For us at the Family Building Society, this means family and how we might help our family members conquer difficulties. By this we mean tackling the increasing difficulties faced by first time buyers trying to get a foot on the property ladder. For the Family Building Society that means our unique Family Mortgage.

Mortgage affordability among first time buyers is probably at its lowest point ever and we at the Family Building Society know that for many, buying your first home can seem nothing more than a distant dream. We know, from talking to families, that mums, dads, grandparents and aunts and uncles are as worried about it as are their young people.

We know too that help won’t necessarily come from high street lenders, and if it does there will be a significant premium to pay. The sad reality is that if your mortgage value is greater than 75% of the property value, you will pay a higher rate of interest than the headline figures often promoted in the media and branches.  

So the Family Mortgage was born. The idea behind the Family Mortgage is that it keeps interest rates low by allowing immediate family to contribute security towards a family member’s mortgage.  Provided the first time buyer in question can put down a 5 per cent deposit, their family can help.

There are three features which can be combined to allow the family to help out. Firstly, a family member can place money in a Family Security Account which acts as security for the mortgage (the money continues to earn interest while reducing the monthly repayments for the buyer). Secondly, the Family Mortgage allows a family member to offer some of their own property’s value as security for the new property. And lastly, if family members are unsure of future commitments, then our Family Offset Account allows the family members to use their savings to help reduce the interest rate that might otherwise be available without actually having to give the money to them.

Family members providing financial support should be aware that the commitment is for 10 years and 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. So who will be your Valentine?

For more details, or to get some instant help from our friendly advisers, visit the website here or call on 03330 140140.

By Steve McDowell

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