Top tips for parents looking to help their child become a first-time buyer if you don’t have savings to contribute towards a deposit.
If you want to help your child buy a home but don’t have enough money to give or lend them the cash for a deposit, there are several options you can consider…
1) Guarantor mortgages
Some guarantor mortgages allow you to use your own home or savings instead of a cash deposit for your child. On the downside, this means you could be liable to meet repayments if your child can’t.
2) Joint mortgages
A joint mortgage considers both your and your child’s income, as well as any money outstanding on your own mortgage. Be careful, if you’re on the property deeds you’ll have to pay extra stamp duty and if you’re named on the mortgage, you’re equally responsible for paying it.
If you have a mortgage on your own property, one option is to free up some cash by remortgaging. This would involve arranging a new mortgage with your existing provider or transferring to another lender. It’s important to think about what would happen if you needed the money back.
For impartial advice on the best option for your family, call Which? Mortgage Advisers on 0800 9805 489 or visit https://www.which.co.uk/money/mortgages-and-property/mortgages/getting-a-mortgage/how-can-parents-help-first-time-buyers-arb7z0g6f19x.
How can parents help first-time buyers?