The Family Building Society is the brain child of the Chairman on the National Counties Building Society, and was set up specifically to “help families who can work together to use their money and their assets more successfully.”

Their “Family Mortgage,” is an interesting product, aimed at the millions of young people still living at home or struggling paying expensive rent.

Most parents want to help out, but many don’t want to simply handover their hard owned cash (or equity) and call it a gift!

How the Family Mortgage Works is simple:
A parent, or any other family member for that matter can either lodge a 20% deposit with the building society or allow them to take a 20% charge on their own house.

The borrower only needs a 5% cash deposit and must qualify for the 95% loan in their own right. In principle, they could of course go to any other of the 5 or 6 lenders offering 95% mortgages at present, but that would only get them an interest rate somewhere between 4 and 5%. Having secured the relatives savings or the additional charge, the Family Building Society is able to offer their 75% mortgage rate which currently stands at 3.14%, fixed for 3 years.

There are of course other Ts & Cs which need to be adhered to, but on the face of it, there is no money for the relative to give away. They even receive interest on their money if they choose the deposit option!

I would suggest anyone looking to help a family member onto the housing ladder takes advice from not only a solicitor, but also an Independent Mortgage Adviser on 01628 507477.

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