Parents remortgage to provide son with deposit to get onto the property ladder

The clients: Parents looking to help their son and his partner get on the property ladder. One parent is employed as a manager for a cleaning services company and the other is in receipt of disability benefit.

The son also receives disability benefit and his partner is employed full-time as an engineer. Together their income totals £46,550 per year.

Property 1: The parent’s home, a 5-bed detached house which they own outright.

Property 2: The young couple wanted to buy a 3-bed, 2-reception room house with off-street parking just a short walk from the local high street and other amenities.
The finance: The parents were hoping to raise £35,000 against their home to provide a 15% deposit for their son and his partner. Keen for a quick outcome, the four of them approached Mortgages for Business for help.

The application process: To start the process, we needed to deal with the remortgage first. Although the parents were looking to raise a relatively small amount, we needed to select a lender very carefully because they had an element of historic bad credit. So, we approached an intermediary only provider which offers a range of mortgages for applicants with a poor credit profile.

Once this application was underway, we got going on the young couple’s case and approached a lender that will accept both gifted deposits and applicants whose income is derived from state benefit. Unusually, we were able to secure a rate based on five times their joint income, rather than 4.5 times income which is the common multiple for first time buyers.

Both mortgage applications were processed extremely quickly and both couples were delighted to receive formal mortgage offers less than three weeks later.