Why the ‘Bank of Mum and Dad’ needs support too
With news reports that the ‘Bank of Mum and Dad’ will help fund a quarter of mortgages in 2016, Chartered Legal Executive Maria Richards, Associate in the Residential Property of Coodes Solicitors explains how parents can support their children onto the property ladder.
“It’s no secret that having children is expensive, but for increasing numbers of parents that doesn’t stop when they become adults. With the growing housing market and lenders requiring larger deposits to secure a good mortgage deal, the younger generation often needs help to get their first step on the housing ladder. News reports suggest that a record 25% of UK mortgages will be part-funded by the ‘Bank of Mum and Dad’ in 2016.
“Unfortunately not everyone has the financial savings to be able to assist and for most of us our property is our biggest asset. This has led to a trend for parents to use property to provide their children with a lump sum to go towards a deposit. There are various options available from financial institutions known as ‘equity release’ or ‘lifetime mortgages’. Equity release can make a substantial amount of cash available either as lump sum or regular income.
“It may sound scary, but there are different ways of releasing equity so it is worth looking into the various schemes, to see if there is something that suits your circumstances. Some products are available where no payments, other than the initial charges, are required from you until your home is sold. This means you remain in your home for as long as you wish and further cash can be taken by equity release later. Subject to certain restrictions, you can usually still move home. If you are aged 55 or over, Coodes can help you navigate through the procedures of releasing money from your property without having to make monthly repayments.
“It is a common misconception with mortgages that you must use the provider’s own solicitor. In fact, you have the right to choose an independent solicitor and this also applies to equity release. Coodes specialises in equity release schemes and can assist you throughout the procedure. We will ensure you fully understand the implications of the plan you are taking out and the impact it will have on your estate and when the loan is repayable. We will also ensure that the product complies with the Equity Release Council’s SHIP Standards and Code of Conduct and that the product is safe, reliable and that you are fully informed and protected so that you feel confident in your choice.
“So if you want to help your children get onto the property ladder but are unsure whether or not equity release is right for you, please get in touch.”
For further advice, please contact Maria Richards, Associate of Coodes on 01726 874752 who can obtain your title deeds and prepare the legal documentation in readiness for when the formal offer arrives from the lender.
For further advice, contact Maria Richards on 01726 874700 or firstname.lastname@example.org