Getting on the property ladder is tough. That’s why many parents are helping their children by contributing to their deposit or acting as a guarantor for their mortgage. In fact, it was said that in 2019 the Bank of Mum and Dad was the 10th biggest lender in the UK, paying out £6.3 billion!
Gifting a deposit is one of the most common ways parents help their child buy a home. With that though come a set of rules that you will need to adhere to:
Many parents don’t have enough savings to gift the money for a deposit. Where this is the case there are several options that can be considered, including:
Finally, anyone gifting money should always seek financial advice on the implications of doing so, especially from a tax and/or inheritance tax perspective.
You may have to pay an early repayment charge to your existing lender if you remortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The fee is up to 1% but a typical fee is £650.