Springboard type Mortgages. ANyone know the in's and Out's?

chunkytfg

Hi MSE,

My parents have aparently decided its's about time myself and my Girlfriend get on the property ladder.

Dad suggested after having a quick look of his options himself the Barclays Springboard mortgage as a way of him providing a deposit without having to just give me money.

I understand the basics that he puts down 10% deposit which gets secured for 3 years in a Barclays account which he cant touch and then I can get a mortgage on my new home. I think I have this right that its designed for people who have no deposit but can afford a mortgage so the secured money is used as a way of the bank allowing you to borrow 100% LTV with a reduced risk to them as they have essentially only lent at 90%?

I think I also saw mentioned being able to put an actual deposit of 5% down to make it a 95% LV mortgage but with 85%LTV risk levels for the bank?

My question is, is it possible to put larger actual deposits down? My GF and I are quite fortunate to be able to save relatively quickly but obviously anything that could essentially speed up the process is better. Would it be possible to put down 15% ourselves and then a further 10% via bank of mum and dad to make it 75% LTV and again get even better rates or is this mortgage type restricted? I cant actually seem to find any info on it so thought i'd ask the MSE masses?

Thrugelmir

If you can put down 15% yourselves. Then there are better options in the wider mortgage market for you. Springboard is targeted at those with no or very low deposit.

Have you considered a LISA? The 25% bonus is an easy way of boosting your savings.

chunkytfg

Thrugelmir wrote: »

If you can put down 15% yourselves. Then there are better options in the wider mortgage market for you. Springboard is targeted at those with no or very low deposit.

Have you considered a LISA? The 25% bonus is an easy way of boosting your savings.

Thats what I figured I just thought i'd check as the full details seemed a little lacking on the Barclays website.

We haven't really considered all the options as we dont actually have the savings yet to buy, it was just that my Dad brought the subject up so I thought i'd do a little research myself.

I Also thought about maybe asking them to 'loan' us the money to use as an offset. Take about a normal offset mortgage with whatever deposit we can muster and then have them lend us there savings to offset against our balance to reduce our payments or help us make overpayments. In a way it would be less of a risk to them than the springboard as the savings are actually accessible at any time?

minimike2

The maximum deposit on a springboard mortgage is 9.99%.

The surety from the "helper" can only be EXACTLY 10% of the purchase price.

Your LTV on this product is not affected by the surety, so if you put in nothing and your dad puts in the surety, your LTV is still 100%, because the surety is not going into the purchase of the property, it is being held separately.

If you put in 5%, your LTV is 95%.

Also it doesn't sound like an offset is going to be much of an option for you as they usually require a higher level of deposit. The money would also have to be held in your name, so they do stand to lose if you decide not to give it back. Also there would be potential implications if they were to die.

Putting down the larger deposit as stated above, will open up better options if you are able to do this.

getmore4less

There are offsets where the money can be in other peoples names so you(as the borrower) can't access it.

ybs offset+ is one of those.
http://www.ybs.co.uk/mortgages/offset/offset-plus-for-savers.html

their mortgage finder comes up with a 2y fixed offset 95% LTV £995 fee 3.69%

the 2y fix 95% regular rate would be 3.49% so quite a small margin.

if you can find
10% 2.24%/2.04%
15% 1.72%/1.52%

http://www.ybs.co.uk/mortgages/offset/index.html

chunkytfg

Many thanks for the Help guys. Much appreciated.

As stated we are a while away from buying anywhere yet just considering our options for when we do eventually decide to buy.