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Borrowing money from family, such as parents and relatives can be a very good idea whenever you are considering raising finance on a mortgage, especially if you are buying a home for the first time, or raising additional funds by remortgaging.
So here we take a look into how borrowing money from family, parents or other relatives could be particularly beneficial in these circumstances along with how we might be able to help you also.
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If you are buying a home for the first time, getting a helping hand from your parents, or other close relatives such as your Grandparents or maybe a Brother or Sister, an Uncle or an Aunt, will not only be very welcome, but it could also save you even more money! Why? Well, let's have a look.
Most people buying their first home these days generally don't or can't save a 10% deposit which was mandatory just a few years ago! Nowadays a good few lenders have 100% mortgage products and thus purchasers don't need to save for a deposit!
That's all very well, but by not having a deposit, it usually means the interest rate is likely to be more expensive, and a higher lending charge (or MIG as it was formerly known) will often be payable, and on a mortgage of £120,000 the higher lending charge is likely to be well over £2,000, and if a 1% higher rate was chargeable, that would be an additional monthly cost of approximately £75.00!
But borrowing money from parents or other family members to help raise just a 5% deposit for example could make all the difference. Let's have a look at the benefits:
However, as a first time buyer, it's worth remembering that buying a property doesn't stop at the purchase price. You will inevitably have to consider at least some of the other attendant costs - if not all of them, and these include:
If you, or your partner (if appropriate), have experienced credit difficulties, then a deposit may be crucial. Even though we can assist with a 100% mortgage product in instances where you may have minor credit difficulties registered against you (for example a small satisfied County Court Judgement (CCJ), or a small credit default), anything more serious could preclude you from borrowing at 100%.
However, if you can get a bit of assistance by way of borrowing money from your family, just a 5% deposit would mean that you'd have a much wider choice of mortgage product, and much more flexibility of terms!
Most parents or grandparents will only usually be too pleased to help out - assuming of course they have some money in the first place. Very often, they won't charge any interest, and many close relatives actually make the deposit a gift!
However, we have to leave those negotiating skills to you!
Yes, absolutely!
A quick telephone call to one of our friendly and professionally qualified Mortgage Advisors will put you in the picture! Naturally, we will of course carefully assess your circumstances, together with your needs and requirements as well as your aspirations, and we'll come up with the most appropriate solution for you and discuss the various options that may be available to you.
We think you will find our service and approach to be friendly, professional and helpful without being stuffy! So please don't hesitate to Contact Us. Our freephone telephone number is Freephone 08000 282 281 and our lines are open from 8.00am until 10.00pm everyday (including the weekends), or if you prefer you can enquire online at any time, and we'd be only too happy to hear from you to see how we may be able to help you.
Well, we hope we've managed to provide you with some insight into why borrowing money from family can be quite beneficial, particularly if you are looking to get on the property ladder. For further essential reading why not put the kettle on and take a look at our Essential Guide for First Time Home Buyers, we think you'll find the information to be hugely helpful, and remember we're only a free phone call away if you think we can be of further assistance.
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Are you worried and becoming stressed because you are having problems getting a mortgage or remortgage? Worry and stress no more! Here at Shire Direct we provide tailor made mortgage solutions to suit you, and can usually help with all kinds of circumstances including...
Remember, we're here to help, and would love to hear from you!
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Shire Direct and Shire Direct Mortgages are trading styles of Shire Processing Centre Limited which is
Authorised and regulated by the Financial Services Authority in respect of regulated mortgage products and general insurances.
Registered No: 302389. Commercial funding and Secured Loans are not regulated by the FSA.
Licensed Credit Brokers. Consumer Credit Licence Number: 349999.
Shire Processing Centre Limited is registered under the provisions of the Data Protection Act by the Information Commissioners Office: Registration No: Z6795249. Registered in England & Wales. Company number: 2732202. Telephone calls may be recorded for training, monitoring and security purposes. All applicants must be aged 18-years or over.
