We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
helping relative to buy
Mr_Singleton
Posts: 1,891 Forumite
Am looking to help a young relative to get onto the housing ladder via shared ownership.
2 issues
1. It used to be easy to calculate how much you could afford to buy ie 3.3 times salary. How is this calculated with a shared ownership property? Have noticed 2 properties selling for the same price yet 1 housing Association want min salary of 26k the other 31k.
2. Most general enquires about a mortgage give a rate of about 5% to 6%. Base rate is 0.5 are banks profiteering? Also as BOE base rates go up to say 5% what the likely relationship to the rate paid by relative?
Thanks
2 issues
1. It used to be easy to calculate how much you could afford to buy ie 3.3 times salary. How is this calculated with a shared ownership property? Have noticed 2 properties selling for the same price yet 1 housing Association want min salary of 26k the other 31k.
2. Most general enquires about a mortgage give a rate of about 5% to 6%. Base rate is 0.5 are banks profiteering? Also as BOE base rates go up to say 5% what the likely relationship to the rate paid by relative?
Thanks
0
Comments
-
1. Not sure.
2. Banks use the LIBOR rate, rather than the BoE rate, as far as I am aware so the disparity isn't as big as you think.
What relation to you is the young relative? Are you sure that a deposit from you would be accepted as part of her mortgage application?0 -
Its my nephew and the money is being gifted straight to him. Bank not involved.
All libor rates are currently under 0.9% down to 0.47%0 -
Mr_Singleton wrote: »2. Most general enquires about a mortgage give a rate of about 5% to 6%. Base rate is 0.5 are banks profiteering?
Banks are allowed to offer whatever rates they like, to gain as much or as little of the market as they wish. They are meant to make a profit. If you or your relative don't like the rate offered, you are free to go elsewhere.0 -
Mr_Singleton wrote: »Base rate is 0.5 are banks profiteering?
Banks obtain deposits from a number of sources, wholesale, retail deposits, securitisation issues etc. Putting FLS aside, banks don't borrow money from the BOE directly to fund mortgages.0 -
Mr_Singleton wrote: »Its my nephew and the money is being gifted straight to him. Bank not involved.
All libor rates are currently under 0.9% down to 0.47%
The solicitor/and banks will want to know where the money has come from and proof due to money laundering. So the bank will be involved, especially if it is shared ownership as a mortgage will need to be raised on the other share.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.8K Banking & Borrowing
- 253.4K Reduce Debt & Boost Income
- 454K Spending & Discounts
- 244.7K Work, Benefits & Business
- 600.2K Mortgages, Homes & Bills
- 177.3K Life & Family
- 258.4K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards