Parents can help first time buyers get the best mortgage.
According to research around 20% of first time buyers rely on help from parents to secure the best mortgage they can.
If you are a parent there are several options available if you want to help your children buy a first home. At Deal Direct we source products from lenders throughout the mortgage market and can find the best deal to suit your circumstances.
A good deposit is important if you are trying to get the lowest interest rate and the best mortgage deal available.
A minimum deposit of 5% is usually required and many lenders require a minimum of 10% deposit for first time buyer mortgages. However, with a deposit of 20 or 25% the availability of mortgages becomes greater and the interest rates on offer are lower.
With a low interest rate monthly payments are less and can mean significant savings. For example, with just 5% deposit 2 year fixed rates are offered by some lenders at around 6%. With a deposit of 25% rates of around 3% are available.
While parents can give children a deposit to buy a first home, there are also mortgage products that allow you to keep savings whilst helping. Mortgages such as family offset products, which allow a deposit to be placed in a linked account to reduce monthly mortgage payments.
The advantage of many of these products is that parents can still get access to savings if there is an emergency. While savings are deposited the home owner gets benefit of paying less interest.
Deal Direct can find you the best mortgage for your situation, so that you can help your children onto the housing ladder.
Call a Deal Direct adviser today.
