The Loughborough Building Society has launched its First Time Buyer Family Deposit mortgage.
Aimed at first time buyers who are struggling to be able to save for a deposit, the First Time Buyer Family Deposit mortgage will mean that first time buyers can now apply for a mortgage even if they don’t have a deposit themselves. They can get help from parents, grandparents or a step-parent.
The mortgage comes with a range of options meaning that family members with a variety of circumstances could make it possible for prospective first-time buyers to buy their first home.
The building society will lend up to 100% of the value of the property subject to individual assessment of each application and a maximum of £300,000 and a minimum of £90,000. The actual amount available to be borrowed will be dependent on the applicant’s income after household expenses and other financial commitments have been deducted.
Gary Brebner, chief executive at the Loughborough Building Society, said: “It’s a sad reality that many young adults currently believe they will never become a homeowner and with the rise of house prices and the stagnation of the average salary, the story is only likely to get worse.
“Initiatives such as the First Time Buyer Family Deposit mortgage are a great way to give First Time Buyers that extra helping hand that they need to get a firm foot on the property ladder and should hopefully encourage more young adults who are thinking of buying that there are other options out there and help is available.”
The First Time Buyer Family Deposit mortgage now comes under the Loughborough Building Society’s Family Assist umbrella of mortgages and joins the Society’s Buy for Uni mortgage which launched earlier this year – another initiative aimed at helping young adults take that first step into the world of home ownership.
Family members assisting the borrower can provide security in a number of ways:
- Security through savings where family members use their savings to help the buyer by depositing the cash in a specifically designed savings account with the Society.
- Security through property where family members use the equity in their home as security. This would be done by giving a legal charge for an amount of equity equal to 20% of the value of the property being purchased.
- A combination of both options with the minimum amount of each security option being £5,000.
The property will be owned by the borrower and the family member providing support will have no rights to the property.
The property must be in England or Wales and the First Time Buyer Family Deposit mortgage is available to 18+ year old UK residents throughout England and Wales who are first time buyers and have sufficient income to afford the mortgage repayments.
