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Getting a mortgage is a big commitment, and if it's your first time we know you'll have a lot of questions. We've created a list of some of the most commonly asked questions below. If you have a question that's not on the list, please get in touch.

If you're the family helping the borrower, we've created a separate set of frequently asked questions which you may find useful.

Who owns the property?
What is the minimum property value?
Are there any restrictions on the type of property I can buy?
What happens if more than one set of parents wants to contribute?
What do I need to be able to apply?
What about any credit cards or other debts I might have?
Will my family have to pay any charges?
Do I have to be a first time buyer?
How can I apply?
What fees are there to pay?
What happens if I want to move to a bigger property?
What happens if the value of my property falls?
What happens if a family member providing support dies?
What happens if I lose my job?
What happens if my earnings don't increase as expected?
What happens if my circumstances change? For example if I borrow with my partner but then we separate?
What's different about the Family Mortgage compared with the Government's Help to Buy Scheme?
Who is the Family Building Society? How safe are they?

Who owns the property?

Like any other mortgage, you will own the property. Whilst family members may provide you with financial support, they have no rights to the property.

What is the minimum property value?

The minimum property value is £120,000. For full details on properties we will and won't accept, along with other criteria we consider, read through our lending criteria.

Are there any restrictions on the type of property I can buy?

Your mortgage adviser will be able to confirm this with you, as we do have some restrictions, but as a general rule we accept properties of a standard construction in England and Wales that are over £120,000. If you have any questions, or aren’t sure if the type of home you want to buy will be accepted, please give us a call or read our lending criteria.

What happens if more than one set of parents wants to contribute?

Up to twelve family members can contribute. This can be a big help for you and your family if you are perhaps buying with a partner and both families want to help. Any money used as security for the mortgage will always remain in separate accounts, not combined into one account.

What do I need to be able to apply?

When you look at getting a mortgage, there are a few things you need to know and have prepared for us.

You need to think about:
A. How much have you saved for a deposit?
B. How much do you need to borrow?
C. How much can you afford to repay each month?

When you are ready to apply for a mortgage we’ll ask for evidence of your income with three months’ payslips. If you are self-employed we’ll need the last two years’ self-assessment calculations with confirmation from HMRC that they have been accepted, or if corrections have been made.

We may also require evidence of some of your regular outgoings if you pay rent and/or a loan payment. There is a full list of all the documents we need to see within our application forms.

What about any credit cards or other debts I might have?

When we look at your application we have to consider the affordability of the mortgage for you. This means looking at how much is going in vs. how much is going out of your account, and how much you can afford to repay each month. If you have commitments to paying any other money back, such as credit cards or student loans, we will consider how these affect the amount you can repay each month if we offer you a mortgage.

Will my family have to pay any charges?

You will be responsible for the majority of the fees when buying a new home. However, your family will need to get independent legal advice which may mean they will be charged a fee.

Do I have to be a first time buyer?

No, the Family Mortgage isn’t only for first time buyers. If you already own a home and need some help to move to a bigger or different property, you can still get a mortgage with us. The home you have with the Family Mortgage needs to be your only residence.

How can I apply?

You can apply to us directly by speaking with one of our dedicated Mortgage Advisers, or you can apply through an alternative mortgage adviser, if you already have one.

What fees are there to pay?

You can find a list of all our fees for mortgages here.

What happens if I want to move to a bigger property?

Your existing property will need to be sold and the mortgage repaid. As long as the sale price is high enough, any charges on family's property are released and any security in the form of savings returned to your family members providing them. You and your family can then decide if you wish to apply for a new Family Mortgage on the new, larger, property.

What happens if the value of my property falls?

House prices do rise and fall even if the general trend in the UK has been upward. Other circumstances, including the your income, will also change. Across 10 years it’s likely that your property may experience both significant peaks and dips in prices. At the end of that period, and as long as mortgage payments have been kept up to date, the charge over savings and / or property provided by your family will be released.

Where the Family Offset Account option was chosen when the mortgage was taken out, the offset support is removed after 10 years (in some cases it may be longer – read this question for more information). Your monthly repayments are likely to rise at this point as you take responsibility for repaying the whole mortgage. If, due to unforeseen changes in circumstances, you are unable to meet the mortgage payments then it may be necessary for you to sell the property to repay the mortgage. Alternatively it may be possible to remortgage to another lender.

What happens if a family member providing support dies?

The death of a security provider doesn’t change the Family Mortgage arrangements. The estate of the deceased person will remain bound by the terms of the Family Mortgage and the charge given over savings and / or property remains in place. This can have implications for the distribution of the estate.

Your family members providing security may wish to review their Will to take account of the support being provided through the Family Mortgage and simplify administration of their estate. Alternatively, it may be possible to arrange appropriate life insurance to cover this eventuality – please speak to your adviser or contact us to be put in touch with one.

What happens if I lose my job?

We understand you may be wary of taking out a mortgage using a charge over some of the value in your parents' home, or using your parents' savings. It’s good to know that as part of the Family Mortgage, subject to meeting certain conditions, we’ll meet your mortgage payments for up to six months on a one-off basis while you get back on your feet if you became unemployed through no fault of their own. This is built into the Family Mortgage and doesn't cost extra.

Please ask about the limitations and exclusions for this cover if you have any questions.

What happens if my earnings don't increase as expected?

You are responsible for making the payments due under the mortgage even if your circumstances change in future.

If the Family Offset Account option was chosen when the mortgage was taken out, the offset support is removed after 10 years (in some cases it may be longer - please read this question for more information). Your repayments are likely to rise at this point as you take responsibility for repaying the whole mortgage. If, due to unforeseen changes in circumstances, you are unable to meet the mortgage payments, it may be necessary for you to sell the property to repay the mortgage. Alternatively it may be possible to remortgage to another lender.

What happens if my circumstances change? For example, if I borrow with my partner but then we separate?

If your circumstances change we will review your mortgage and look at your current loan to value (LTV). Depending on your loan to value at the time your circumstances change we will also assess if any security from your family can be released. Your loan to value is the amount of money outstanding on your mortgage compared to your total house value.

What's different about the Family Mortgage compared with the Government's Help to Buy Scheme?

The Government currently offers one type of ‘Help to Buy’ scheme, called the Equity Loan.

Equity Loans are loans from the Government that are only available for new builds, through a registered builder. You need to have a minimum 5% of the purchase price as a deposit, and the Government will lend you up to 20% of the purchase price. After five years you have to start repaying the Government fees, which increase each year up until you’ve owned the home for 25 years, or you sell your home, whichever is sooner, when you then have to repay the loan to the Government. Loaning you 20% will enable you to access lower mortgage rates, but you will have to factor in repaying the Government a fee each year after five years, and also saving up to repay the loan, or prepare to have it deducted from the house sale when you go on to buy your home. The Government also benefits from any increase in your house price value when you go to repay the loan.

If you live in London the Government has increased the maximum loan amount with the Help to Buy scheme to 40%, if you have a 5% deposit. This means you will need to get a mortgage on the remaining amount up to 55%. The Government loan works in the same way as the 20% loan, and after five years you will be charged a fee for the loan, along with the expectation you will pay back the Government loan percentage when you sell your home, or after 25 years, whichever is sooner.

In comparison, with the Family Mortgage you don’t have to pay any additional fees after five years, and you don’t have to repay any additional money when you want to sell your home, or if you stay there for 25 years. This means that you benefit 100% from any increases in property prices, and you won’t need to factor in having less money for your next house purchase, or saving up to repay after 25 years. You also aren’t restricted to buying a new build through a registered builder; in fact, you can buy the home that suits you best.

Who is the Family Building Society? How safe are they?

The Family Building Society was launched in 2014, as part of National Counties Building Society. National Counties Building Society was set up in 1896 and has a long history of securely looking after people’s money. The Family Building Society was launched with an aim of offering innovative solutions, such as getting on the property ladder with as little as a 5% deposit, without having to borrow more money from family or another scheme. By ‘thinking outside the box’ the Family Building Society looks at the issues facing people today, and provides a different way of doing things.

Family Building Society is a trading name of National Counties Building Society which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. This means the building societies have strict rules and regulations to follow.


What next?

We've created a short video that explains how family can work together to help a first time buyer. Alternatively, you can read more about the different ways using the links below:

Representative example 

 

A mortgage of £305,330 payable over 33 years initially on a fixed rate for 3 years at 2.94% and then on our variable Managed Mortgage Rate, currently 4.79%, for the remaining 30 years would require 37 monthly payments of £1,205.49 and 359 monthly payments of £1,508.35, plus one initial interest payment of £764.12.

The total amount payable would be £587,738.90 made up of the loan amount plus interest of £281,534.90 and an application fee of £175, a product fee of £599 and a mortgage exit fee of £100.

The overall cost for comparison is 4.5% APRC representative.   

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THE MORTGAGE WILL BE SECURED ON YOUR HOME

 

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

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