5% deposit for first home... if Mum agrees
Money Mail Article
23 June 2010
Bath building society is offering mortgages to first-time buyers who have only a 5% deposit - as long as they can persuade their parents to put up their own homes as collateral. The Parent assisted Mortgage is available to customers of the five-branch society and is also available through independent financial advisers and mortgage brokers.
It was launched last year for first-time buyers who had saved a 10% deposit, but the society has now extended the loan.
The new deal allows borrowers to take a 95% loan-to-value loan at a three-year discount rate of 5.1%.
The arrangement fee is 0.5%, minimum £599, and there's also a £100 non-refundable administration fee.
But parents should think twice before offering to help their children get on the property ladder, warns Melanie Bien, director at mortgage broker Private Finance.
'Their own home is at risk if their child defaults on their mortgage payments with this deal,' she says.
Under the deal, parents must put up their own homes as collateral for up to 20% of the purchase price.
If parents already have a mortgage, the value of that plus the second charge must be less than 70% of the total value of their home.
General Information
Solicitors
We have a fixed fee arrangement in place with Martin Kaye Solicitors,
to cover the cost of the conveyance and the registration of the
collateral charge on the parental property. Please ask for more
details.
Current Rates, Terms and Charges
See current rate web page
Next Steps
For more information or to apply, please email mortgages@bibs.co.uk
or contact the
Mortgage Department on: 01225 475702
Bath Investment and Building Society is authorised and regulated
by the Financial Services Authority for advising, lending and
administering Mortgage Contracts.
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