Horsham is a popular location and
as a result scores highly in the property price stakes. That said there are
many 'would be' homebuyers with an appetite more expansive than their budget
and this can be a deal breaker if income and deposits do not meet lender
criteria. This is where parental support can help.
The traditional route has been
through a parental guarantee, so parents guarantee the full amount lent to the
siblings with the lender. Although lenders no longer favour this so much
on a stand alone basis. Often a lender will prefer a parent to actually
join in using their income to support affordability until such time as the
original borrowers income has grown sufficiently to assume full responsibility.
Alternatively, the parents may
gift the siblings the deposit toward the purchase of the new property. The
parents must confirm that there are no monthly repayments, it is a non
repayable gift and that they will have no interest in the new purchase.
Finally, a lender may sometimes
accept a charge taken on the equity of a parental property thus alleviating the
need for such a large deposit.
It may well be that a hybrid of
all three may work too.
Another potential stumbling block
may be age with some of the high street lenders still working off a retirement
age of 65. So what about the growing population of people working into their
70's and further? Well there are options
and not all based on Equity Release although there
are hybrid options are available to cater for most needs. Many will
lend long in to later years, but these will be specialist lenders and not high
street names. In the current climate this is not an issue and you should
not be shy of dealing with a non-household
name. Some of these are small regional building societies who have been
established over 100 years!
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