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Family Assist Mortgages

Many of our clients looking at the Equity Release options are often looking to help their children with their first home purchase. This has become requested where house prices are high, and affordabilty makes it tough for younger adults to get on the property ladder.

There are a number of Family Assist Mortgage Schemes available, where as parents you could help, without the need to release equity from your property. We have a range of options where your property can be used as a form of security for a short period of time, and the borrowers could get up to 100% of what they need (subject to the usual affordabilty calculations). And if you have some cash savings, that could also be used as a form of security, rather than having to give a large financial gift you might not want to release just yet.

This will form part of our discussion should you be looking to help your children financially – if this is something you wish to explore, we would be delighted to help.

Working Example

Mr F is looking to buy his first property, but due to the high cost of rent he is struggling to save sufficient cash for a deposit. He has income of around £40,000 per year, with no significant outgoings.

His parents have a home that is unencumbered (without mortgage), but don’t have sufficient cash savings to gift their Son the deposit to help him.

One of our Family Assist lenders was able to lend £190,000, 100% of the Purchase Price, with the parents property used as security for 15% of the purchase price (£28,500). A charge is placed to the value of £28,500 on the parents property.

In 3 years time, the charge over the parents property will be removed by the lender, and Mr F will be able to refinance / remortgage on his own, without parental support.

This has allowed the parents to help Mr F with his first property purchase, without having the necessary cash savings to gift the deposit.

Your home may be repossessed if you do not keep up repayments on your mortgage.