Helping the Next Generation Get on to the Property Ladder

Helping the next generation get onto the property ladder and secure their dream home is one of the most rewarding aspects of what we do as a lender.

In this recent residential case, we did just that, aiding a father in his support of his daughter’s first-time buyer purchase of a mid-terrace house in Gloucester valued at £395,000.

She wasn’t in a position to purchase this house on her own, so through the use of a JBSP structure, he could help support affordability while his daughter remained the sole proprietor.

Background of the Client

• Joint borrower (Father): Semi-retired and receives a private pension of £48,000. Currently earning £62,100 annually as a Health & Safety Officer, though this is expected to end during the mortgage term. He also holds £351,000 in a joint account with his wife. He will receive £8,400 in his state pension during the term. His own residential mortgage has been paid off.
• Sole Proprietor (Daughter): Currently renting and paying £520 per month, which is supported by her father. She is not currently employed and is not contributing to affordability.

With a large deposit of £295,000 gifted by her father, the daughter applied for a £100,000 mortgage on a 25-year capital and interest repayment basis, at a fixed rate of 5.44%. This resulted in a low LTV of 25.32%, with monthly repayments of £610.51.

What We Did

We assessed the JBSP case thoroughly. Despite the daughter not currently earning, the father showed strong affordability through his recent pension increase, strong income and significant savings.

We also evaluated any outstanding unsecured credit balances, which totalled a modest figure of £2,840.

Once the daughter begins employment and can support the mortgage repayments, the mortgage is expected to be transferred solely into her name.

After considering all factors, we were pleased to approve this application and support the next generation in achieving homeownership.

 

Have a residential case? Discuss it with your local representative

Our Telephone BDM’s and Key Account Managers are here to help you find a solution to your case. Contact your representative to discuss your requirements.

Alternatively, you can contact our friendly intermediary team on 01384 231414 or email [email protected]