First Time Buyer Mortgage Advice - Springboard vs. 5% deposit...

ChrisBee383 · 16 August 2016 at 10:14AM

Hi,
I’m looking to buy my first home and am looking for some advice (please!). My situation is that I previously ran up debt but paid a lot off myself then my parents paid off the final £10k. I would like to repay it but don’t have to if I can’t. I now have around £16k in the bank and am now looking at a FTB mortgage for a home of around £150/£160k (I have at least 10% of the value in the bank).

2 options I am considering:
- 1: Look to get a 5% mortgage – this will leave me with some savings in the bank and I can make up the other few thousand over the next year to repay my parnets in full. .
- 2: Transfer the full £16k to my parents and take out a Barclays family Springboard Mortgage. This requires 10% of the amount to be put in escrow for 3 years and assuming I make all the payments at the end of the 3 years the full £16k is returned to my parents: they keep their £10k and I get some cash back.

Option 2 looks best for me and the mortgage would be affordable based on the advertised rate of 2.99% (repayments would be roughly the same as my current rent, I should have no solicitor fees as a sibling is a lawyer, and stamp duty will be under £1k which I can afford).

Can the forum please tell me if there are any obvious downsides to option 2? Also, are Barclays likely to refuse it on the basis that I will be transferring the money to my parents first?

Thanks in advance.