Calling all First Time Buyers – Time to sweet talk mum and dad!
One thing that has come out of lockdown is a steady stream of First Time Buyers ready to get on the housing ladder.
Unfortunately, the banks have for a number of reasons (surveyors doing physical valuations, one hec of a backlog of applications and having to spend a lot of time / money dealing with the 3-month mortgage payment holiday), withdrawn most of their 90 and 95% mortgages, for the time being at least anyway.
There are however, a few schemes available if you can persuade a close relative to help, and the great news is that in some cases, they don’t need to fork out any money!
The Family Mortgage from The Family Building Society
This allows first time buyers to borrow up to 95% if a family member is willing to deposit some savings into a “Family Security Account” for a certain period of time, which earns interest.
Alternatively, if they don't have spare cash a family member can give a charge over some of the value in their own property as security instead.
The Family Springboard Mortgage from Barclays
Barclays allow you to borrow up to 100% of the property value if a family member (or in this case a friend) will put savings in an account with them. Again, there are conditions but assuming the mortgage is well maintained, they will get their money back, with interest.
The First Start Mortgage from Bank of Ireland
The Bank of Ireland scheme boosts first time buyer’s borrowing power by combining their income with that of a sponsor. So together you can borrow more, responsibly. The sponsor needs to be a close relative, normally a parent, who is added as a co-borrower.
Joint Borrower Sole Proprietor
Other lenders allow parents or relatives to help out first time buyers by joining them on the mortgage in order to achieve lending requirements without insisting they are joint owner of the property. This gets around the additional stamp duty problem of a second mortgage and allows first time buyers to effectively own their first home alone.
Help to Buy / Shared Ownership
If none of this works then the government are still offering 20% “Help to Buy Equity Loans” on new build properties until 2021 when the scheme changes slightly and will be for first time buyers only. You will need to raise at least a 5% deposit.
Shared Ownership schemes are another great way of getting on the ladder. This allows first time buyers to part rent and part buy. Again, you need to raise a 5% deposit, but only on the share you are buying, so this reduces the cash you need to save.
Click here for more information on First Time Buyer Mortgages.
If you would like any details on any of these schemes Contact Mortgage Required for an initial chat on 01628 507477 or click here to book a free call or video appointment.
Download our Free First Time Buyers Guide
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