Research carried out by the Council of Mortgage Lenders has shown that around 66% of first time buyers have assistance from family members when buying their first home, with the average deposit for a first time buyer in the North West being over £16,000. Such support often comes in the form of a gifted deposit however this can be risky as the helper can’t rely on their money being returned should they ever find that they need it in future.
Recognising this the Vernon Building Society has developed its Family Assist Mortgage, an innovative mortgage product that allows a first time buyer to borrow up to 100% of a property’s purchase price provided that a relative is able to deposit savings equivalent to 20% of the purchase price for a minimum of 4 years.
The savings are kept in an account separate to the mortgage and are returned to the relative after 4 years provided that all mortgage payments have been maintained satisfactorily. The savings are offset against the mortgage balance which means that they proportionally reduce the amount of interest paid by the borrower.
Ian Keeling, Head of Sales and Marketing at the Vernon said: “We understand that saving for a deposit can be difficult with many first time buyers requiring support from family members to take their first step onto the housing ladder. We’re offering an alternative to the traditional gifted deposit with our Family Assist Mortgage which allows family members to link their savings to their relative’s mortgage without handing over the cash directly.”
The Family Assist Mortgage is exclusively available to first time buyers within a 25 mile radius of Stockport.
For more information about the Vernon’s mortgage range visit www.thevernon.co.uk
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