As first time buyers struggle to qualify for the mortgage they need to buy a home, there’s continuing demand for help from the bank of Mum and Dad, says the Times.
Most parents make outright gifts of cash towards deposits. Where the money is a loan, it has to rank as a second charge with the mortgage lender’s charge having priority. Only a few lenders now offer the option of being the guarantor of a mortgage, but several still offer joint mortgages. Here the parent can initially be co-mortgagor but can be removed from the mortgage once the child’s income is sufficient to support the repayments.