Nationwide has revealed its Family Mortgage, perfect for supportive and generous families.
Nationwide’s Family Mortgage is designed to allow family members to act as a guarantor. Unlike other guarantor mortgages, which are designed for parents and their children.
Family members can now borrow against their own home. This so they can raise money so they can “gift” a deposit on their first property.
It allows any family member to take a mortgage up to 80% of the value of their home, the proceeds of which are then given to and used by another family member to use as a deposit on their own purchase.
Whilst Nationwide is not the first bank to offer a mortgage designed to support parents who wish to support their child, the family mortgage they offer is more flexible.
Many family mortgages are strict on the role the family member fills (I.e. they must be a parent). With the Nationwide mortgage, it’s not just parents and children who qualify – grandparents, siblings, aunts, uncles and step parents can also fund another family’s member’s bid to buy a home, or re-mortgage an existing property.
Nationwide’s head of mortgages Henry Jordan said: ‘We’ve launched this in recognition of customer demand for a flexible and accessible way to use the wealth tied up in people’s homes. The aim is to help not only first-time buyers but also home movers to secure their own property.’
The recent analysis performed by Nationwide suggests a large portion of recent mortgage lending, involves a deposit which was either partially or wholly gifted.
The Council of Mortgage Lenders has revealed that the average deposit for a first time buyer in the UK is now £28,200 whilst in London, its £65,600′
We know that trying to raise a deposit can be the most significant barrier to becoming a home owner,’ said Jordan. ‘This Nationwide range will enable families to give mutual support to each other and provide new options for home ownership.’
How does a family mortgage work?
Both the family member raising the money for a deposit and the family member accepting It have to take a mortgage with Nationwide, however they free to choose from any of the deals available.
WHO QUALIFIES AS FAMILY?
– a spouse
– civil partner
– parent
– brother or sister
– child
– grandparent
– grandchild
or someone whose relationship has the characteristics of a family relationship such as a step child or partners.
In order to qualify, both parties looking to borrow must meet all of Nationwide’s standard credit criteria. They should also be able to prove that they can afford the monthly repayments. It is also possible to re-mortgage with Nationwide, even if you have your current mortgage with another lender.
