- Salli Anstey
Many assume that the property market slows down in the run-up to Christmas and buying or selling a home over the festive period is something that is put on hold and simply doesn’t happen. However, according to Rightmove, the period between Christmas Eve and New Years Day is one of their busiest and has been getting more so in recent years.
It makes sense – the festive holidays are the very period that the whole family is generally all together in one home. There’s time and space to talk about plans and dreams and to feel an extra surge of motivation to make a change.
For a first-time buyer especially, who is struggling to get a foothold on the property ladder, discussions about how a family member may be able to help could certainly lift their spirits. The good news is, there are so many ways now in which parents, grandparents or other relatives, can help younger family members secure a home via a family assisted type mortgage. Here are just a few:
- Guarantor mortgage: An option for first-time buyers who don’t have the required deposit or have financial circumstances that may discourage lenders. Family members who own their own property can use their income and/or property credit levels to guarantee the mortgage debt.
- Joint Ownership: With this option both family member and child can jointly own a property with both names on the mortgage and deeds. The size of the loan will be based on the earnings and assets of both.
- A version of this, the joint borrower sole proprietor mortgage, allows a family member to help their child buy a home by joining their mortgage but the parent isn’t named on the title deeds with this version – avoiding the higher stamp duty.
- Family offset mortgage: An option to boost income levels in order to afford repayments. Family members, such as a parent, can put their savings into an account linked to their child’s mortgage. The money in the savings account is then deducted from the mortgage, making the child’s repayments cheaper still allowing them to have full rights to their property.
- Gifted deposit: An option for those who are struggling to save for the minimum percentage needed for a deposit. A gifted deposit is a sum of money, normally provided by a family member, that forms all or part of the cash required for a deposit.
And, first-time buyers would be advised to beat the New Year rush by getting themselves pre-prepared over the holidays in order to hit the ground running by:
- Pulling together their last 3 months’ pay slips or business accounts, latest P60 tax form, bank statements, ID Documentation and proof of address e.g. a recent utility bill.
- Making sure they’re on top of all outgoings and incomings as lenders now need to be re-assured that borrowers are managing their finances effectively in order to meet a potential increase in mortgage payments.
- Maximising their credit score by making sure they’re on the electoral register, that all accounts have the most up to date personal details and cancelling unused store cards, to name a few.
At Private Wealth Mortgage we are experts in navigating the mortgage market, whether that’s over the festive period or beyond and can guide on what’s needed to make a new home a reality. What’s more, we can provide a free, no-obligation consultation where we’ll consider all the viable options available and advise on the best way forward. Give one of our expert advisors a call on 01403 270 006. Alternatively, email: info@privatewealthmortgages.co.uk