Family Equity Loan Plan

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If you are a first time buyer struggling to get onto the property ladder, First Mortgage Family Equity Loan could provide the answer.

If, like many hard pressed first time buyers you find yourself struggling to get a deposit together and are frustrated that you may not be able to take advantage of the current hold on house prices, a Family Equity Loan arranged by First Mortgage could be the answer to you getting that foot on the property ladder today.

Another option may be the LIFT shared equity scheme being run by the Scottish Government. Please see the LIFT mortgages page for more information.

So how does a Family Equity Loan work?

 This simply requires support from a family member to become an “equity loan” stakeholder in the proposed home purchase. Rather than gifting a deposit, a family member (usually the parents) will take a stake in the property by providing an Equity Loan secured against the home by a simple minute of agreement. This means that whilst the buyer owns 100% of the home, the property cannot be sold without the parent’s loan having been first cleared.

 In general terms, the expected percentage split between the child and parent will be 90% and a 10% Equity Loan making up the balance of the purchase price, although the percentage split can be as much as the two parties to such an agreement decide.

 Providers of the Equity Loan will share proportionally in any profits made when it comes time to sell the property, which could potentially make this a very profitable arrangement for all parties involved. Alternatively, the Family Equity Loan can be repaid in full or in instalments prior to any sale using an agreed interest calculation if any interest is to be charged. If the parent so decides, this equity loan can be ‘gifted’ should the circumstances suit.

Contact us now to discuss the options available to you or see Parents Questions for more information about the Family Equity Plan.

Why use the ‘Family Equity Loan’ plan?

 First Mortgage will provide FREE professional mortgage advice to both parties, thereafter making a recommendation from whole of market.
 Helps first time buyers get onto the property ladder, with 100% ownership
 Provides parents with security on their capital outlay
 Complete whole of market mortgage source available
 Solid investment opportunity for all, with excellent medium to long term potential returns
 Flexible terms to suit both parties. It will be written under your own agreed terms, which can be amended in the future.

We understand first time buyers don’t want to rely on parents for charity and with a Family Equity Loan this needn’t happen.

This approach provides a solid investment opportunity for all involved. There will be no premium or extra charges on the mortgage, and customers can choose from a range of competitive deals including fixed rate and tracker options.

Contact us now to discuss the options available to you or see Parents Questions for more information about the Family Equity Plan.