How Family Can Help First-Time Buyers

Buying a first home can be an exciting and daunting experience, especially for those who have never navigated the process before. As a first-time buyer, it can be difficult to come up with a sizeable deposit and meet the strict lending criteria imposed by many mortgage lenders. Fortunately, there are several ways in which family members can help first-time buyers get onto the property ladder.

  1. 1. Gifting a deposit

One of the most popular ways for family members to help first-time buyers is by gifting them a lump sum of money. This can be used as part of the deposit for the property, which can make a significant difference to the size of the mortgage required. With a larger deposit, first-time buyers are likely to be offered better interest rates and have access to a wider range of mortgage deals.

  1. 2. Guarantor mortgages

Another option is for family members to act as guarantors on the mortgage. This means that they are willing to put their own property or savings as collateral to guarantee the loan in case the first-time buyer is unable to make the repayments. This can increase the likelihood of the mortgage being approved, as it provides additional security for the lender. However, it is important to note that being a guarantor can be a significant responsibility and should not be taken lightly.

  1. 3. Offset mortgages

Family members can also choose to provide financial support through an offset mortgage. An offset mortgage allows the borrower to use savings held in a linked account to reduce the amount of interest payable on the mortgage. Family members can choose to deposit their savings into the account, which can help to reduce the overall interest paid on the mortgage. This can be a great way to provide support without gifting a lump sum of money or putting their own property at risk.

For those who have parents or grandparents with a large amount of equity in their property, a family offset mortgage may be an option worth considering. This involves the family member depositing a lump sum of money into a linked savings account, which is used to offset the mortgage interest payable by the first-time buyer. This can result in significant savings over the life of the mortgage and can be a great way for family members to help their loved ones get onto the property ladder.

  1. 4. Specific types of mortgages

It’s also worth noting that some lenders offer specific mortgage products designed for family members to assist first-time buyers. For example, some lenders offer family assist mortgages, which allow parents to use their own property as security for their child’s mortgage. This can help first-time buyers to access larger mortgages and better interest rates than they would be able to on their own. 

It’s important to remember that buying a home is a significant financial commitment, and it’s essential to seek professional advice before taking out any mortgage product. Working with a mortgage broker can be a great way to explore the options available and find the best mortgage deal for your individual circumstances.

Final thoughts

At Sett Mortgages, we have access to hundreds of lenders and can help you navigate the complexities of the mortgage market. Our expert advisors can provide friendly and approachable guidance on the best mortgage options for you, including those that involve support from family members. Get in touch today to find out how we can help you get onto the property ladder.



  • Elliott Benson

    Meet Elliott, a seasoned mortgage broker with over nine years of experience in property, and the founder of Sett Mortgages. With a background as a sales negotiator and mortgage services manager, he is a trusted professional with extensive knowledge in all things mortgages. Elliott's empathetic approach and clear communication style make him an approachable expert, decoding the complexities of mortgages for clients from diverse backgrounds. He stays up-to-date with the latest trends and regulations, offering cutting-edge solutions tailored to clients' needs. Committed to their financial well-being, he guides them through the mortgage process, ensuring countless successful and satisfied clients. Elliott's passion extends beyond his practice; he's a prolific writer, sharing his knowledge and insights in industry publications and blogs. His mission is to empower others with the information they need to make sound financial decisions.

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