June 16, 2022 | Mariel Roe
Many parents want to help their children get on the property ladder, but they often assume there is nothing they can do if they don’t have a substantial lump sum to pass over.
However, that isn’t actually the case. At Properly, we often advise clients who are searching for property solutions for their children, and one of the options we recommend is a family offset mortgage.
Family Offset Mortgages – What Are They?
A family offset mortgage is one of the types of offset mortgage on the market today. All kinds of offset mortgage work by offsetting savings against the home loan to reduce its total amount and, thus, reducing how much interest is paid overall.
There are three key points to note when it comes to family offset mortgages:
Bearing these three points in mind, it’s important to work out the advantages and disadvantages before going for this option.
How Much Do I Need To Have In My Savings Account To Apply For A Family Offset Mortgage?
All lenders have their individual criteria when it comes to applying for a family offset mortgage, but in general, you’ll need around 10% of the property’s purchase price. With some lenders, the levels will be significantly higher. There may also be extra stipulations, for example, a minimum yearly income.
Can I Make A Family Offset Mortgage Application?
If you have sufficient savings, there are some other considerations to keep in mind when determining whether you can make a family offset mortgage application. Approval will depend on your credit history, debt-to-income ratio, and even purchased property type.
Does Every Lender Offer Family Offset Mortgages?
Some lenders specialise in this form of an offset mortgage, but many of the big-name lenders don’t. Other lenders provide them, albeit under a different name. If you’re thinking of getting a mortgage like this, you should get professional guidance first.
Should I Opt For A Family Offset Mortgage?
There are a number of advantages to applying for a family offset mortgage as a way of helping your child buy a property. They include:
On the downside though:
With all of this in mind, it’s easy to see why talking to a mortgage professional is so important. However, once you’ve made your decision, or if you need advice about finding a suitable property for your child to help them onto the property ladder in London, don’t hesitate to call our team at Properly a call on 0207 459 4400.
London Youth work to improve the lives of young people in London, challenging them to become the best they can, and last year helped over 27,000 young people through their sports development, youth action and involvement, arts and outdoor education programmes and employment prospects. We feel strongly that all young people should have an opportunity to develop themselves, and so are delighted to be able to support London Youth in their work, providing young people with access to opportunities they might not otherwise have had, to learn new skills, to make a positive change in their communities and to shape the city they live in.
Glass Door helps homeless men and women in London through their large network of emergency shelters and support services. These winter shelters provide a warm welcome, food, safety and shelter for up to 170 people every night. Properly feels passionately about the issue of homelessness. That is why we are delighted that together with our clients we can assist Glass Door in their fantastic work to help some of the most marginalised people in society.
Families become homeless for reasons we can all identify with. We are concerned about people who are struggling to keep things together in our fast-paced world – and we care about those who have no support. We chose the Doorstep Homeless Family Project because they are passionate and effective yet they are a small team with limited funding. They provide homeless families, living in temporary accommodation in London, with access to services to secure the emotional and practical support they require to enjoy a better quality of life.
We need nature and nature needs us. We support The London Wildlife Trust because we share its concern for the environment. We want to ensure that we keep nature in mind as we work in the property market – and crucially, with people’s homes. We also want our employees to engage with nature and benefit from the wellbeing this brings. London Wildlife Trust cares for over 37 of London’s spaces, and their vision is: “a London alive with nature, where everyone can experience and enjoy wildlife”.
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