FTB Mortgage with parent support

hainesy

Hi, I'm looking to buy my first home together with my girlfriend and was after some input and advice on the best way to proceed based on my circumstances.

We made the decision to start budgeting, clearing debt & saving at the beginning of the year. So far I've cleared off all my credit cards, and started saving each month, together with a bonus payment in April I should have £7k or so saved.

My income is good & together with my partner we have a combined income of £90k. I'm looking to buy a house for between £250-300k. My credit history is pretty reasonable and only other major outgoings is a car repayment a couple of finance agreements.

My problem is obviously currently the lack of a decent sized deposit. My parents are supportive and have found a mortgage product called Parental Assistance Mortgage (PAMS) offered by Bath Building Society. This offers 95% & even 100% LTV which is secured by a charge placed on their own property. My parents are retired, of pensionable age and own their own house outright.

Is this a good product? It seems to be a good way for them to be able help me without directly costing them money or impacting them. Are there any other alternative products that I should look at? Is there another way of leveraging the value of their property to assist us with buying a house / helping with the deposit?

As a secondary issue; my girlfriend is Norwegian, she has been in the UK for just over 3 years and has been working full time for this time. Obviously we're not married and she isn't a UK citizen - will mortgage providers accept her (and her earnings) as part of the application?

Cheers

Mark

kingstreet

Parental help mortgages split into several types;-

- charged savings - your parents place money in a savings account and this is used to secure your increased deposit

- charged property - your parents have a charge taken over their property and this is used to secure your increased deposit.

Research the products and lenders open to you. Work out which one best suits your needs.

If your partner is a non-EU citizen, her acceptance by a mortgage lender will depend on her status/visa. You'll need to factor this into your research into the products if you need her income to get the amount you wish to borrow.

hainesy

Thanks kingstreet. RE: Partner's eligibility; So you think it's likely to vary from lender to lender? Norway is slightly unusual in that its not EU but in the EEA. She can work & live in the UK with no visa requirements or restrictions.

kingstreet

EEA nationals should be fine.

I was confusing EEA with EU.

steve-L

hainesy wrote: »

Hi, I'm looking to buy my first home together with my girlfriend and was after some input and advice on the best way to proceed based on my circumstances.

We made the decision to start budgeting, clearing debt & saving at the beginning of the year. So far I've cleared off all my credit cards, and started saving each month, together with a bonus payment in April I should have £7k or so saved.

My income is good & together with my partner we have a combined income of £90k. I'm looking to buy a house for between £250-300k. My credit history is pretty reasonable and only other major outgoings is a car repayment a couple of finance agreements.

My problem is obviously currently the lack of a decent sized deposit. My parents are supportive and have found a mortgage product called Parental Assistance Mortgage (PAMS) offered by Bath Building Society. This offers 95% & even 100% LTV which is secured by a charge placed on their own property. My parents are retired, of pensionable age and own their own house outright.

Is this a good product? It seems to be a good way for them to be able help me without directly costing them money or impacting them. Are there any other alternative products that I should look at? Is there another way of leveraging the value of their property to assist us with buying a house / helping with the deposit?

As a secondary issue; my girlfriend is Norwegian, she has been in the UK for just over 3 years and has been working full time for this time. Obviously we're not married and she isn't a UK citizen - will mortgage providers accept her (and her earnings) as part of the application?

Cheers

Mark

My situation is not too dissimilar overall.
My brother has offered to help. One suggestion I got was an offset mortgage. If they have cash they can use this to offset your interest payments and keep it in their name. It won't affect the LTV though.

If they can afford could they help with the deposit?
This at least helps the LTV and gets you a better rate.

I don't know for sure but I expect EEA nationals might be treated differently by different lenders. Both countries were 'rich' by UK standards though Iceland is obviously in a different position now. The other non EU country not in the EEA is also 'rich'... hence I don't think in most cases Swiss or Norwegians are going to be particularly disadvantaged for mortgages.

Yorkie1

How secure is your job?

How willing are you to jeopardise your parents' security if for any reason you cannot pay the mortgage - from what you've said, you won't have any 'rainy day' fund to fall back on?

hainesy

As secure as it can be in these times, obviously it is not an ideal situation and something of a concern in the back of my mind. Having said that I work in IT and could find something else quite easily in Cambridge or London at a push.