How can you help a loved one step onto the property ladder?
There are options for those who still want to boost a loved one’s borrowing power without having to dig deep into their pockets. Below, we’ve listed three to consider:
Joint borrower – sole proprietor mortgages
This type of mortgage enables parents to help their child by going onto the mortgage, using their income to boost overall affordability without being named on the title deeds.
On doing so, the parent does not have to pay the additional stamp duty surcharge on a second property, as well as capital gains tax when the property is sold.
Equity release
No matter their age, parents and grandparents could remortgage their own property and gift the funds towards their loved one’s purchase as a deposit.
Downsizing
It may sound extreme, but some parents and grandparents willingly sell their property and downsize if it means they are able to financially support their loved one’s property dream. More concerned about suitability to their needs rather than size, the Retirement Confidence Index reported that by 2036, the estimated equity release via downsizing could total £877 billion in the UK.
And don’t forget!
There are affordable housing schemes available to help those who need extra support including Shared Ownership and First Homes, which are options where parents are unable to offer financial assistance in a house purchase.
If you'd like to talk to us about a mortgage, pop into your local branch or book a mortgage appointment with one of our qualified mortgage advisers.