A Helpful Start for the first time buyer
Barclays has introduced a new mortgage scheme. Helpful Start is part of their Family Affordability plan. It allows parents to help their children with mortgages in a way not seen before. A parent’s income is also taken into consideration when applying for the mortgage without them being on the property deeds.
The scheme is available across all of the lender’s mortgage range, including its NewBuy product.
It enables parents to help their children get on or to move up the property ladder through a joint mortgage without giving a lump sum away.
If the mortgage is approved, all parties will be liable for the monthly payments. The parents will appear on the mortgage but they won’t be co-owners of the property.
Helpful Start is however not available in Scotland and Northern Ireland.
When considering to lend to a first time buyer, lenders look at three criteria
- Credit Worthiness
- Loan to Value
The Family Affordability Plan and Helpful Start tackles the first criteria, which has significantly made it difficult for first time buyers to get on property ladder. It will not alter the amount the customer can borrow.
When the first time buyer is ready to manage the mortgage on their own, they can remove their parents from the mortgage by remortgaging soley in their name in traditional way.
There has been a reduction in the number of guarantor-type products in the market over the past few years, this scheme is a step in the right direction.
This is a excellent move taken by the High Street lender in a difficult market for first time buyers and those wanting to upscale. Independent Brokers like myself have a wealth of tools available to help clients, and the addition the Family Affordability Plan is a excellent addition to my Tool chest.
Helpful Start and the Family Affordability Plan is what first time buyers have been calling for, the last few years have been hard for them to get on the property ladder. We welcome such a scheme and hope other lenders see the light and follow with their own schemes.
READ our first time buyer articles:
- What sort of costs involved in buying a property for a first time buyer
- How to get a Mortgage – Part one: Credit
- Taking out a mortgage for the first time home buyer
- What the NewBuy scheme means for a first time buyer
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