FAMILY MORTGAGES

How to help your child buy their first home
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HOW TO HELP YOUR CHILD BUY THEIR FIRST HOME

If you want to help your child buy their first home, we have a number of mortgage and savings solutions designed specifically for first time buyers, including our Family Mortgages, which allow you to support your child financially without having to give them money.

We've also got a wealth of experience of helping first time buyers, so feel free to phone us or call into a branch if you'd like some advice.

FAMILY MORTGAGES

The most common and straight forward way to support your child, if you can afford to do so, is to gift an amount of money towards a deposit, which would be non-repayable.

If you're not in a position to contribute to your child's deposit with a cash gift but you'd still like to help, our Family Mortgages provide an alternative way to help.

Family Mortgages - A brief overview

Our Family Mortgages require the parent to provide a suitable security over the loan - a quick summary is below. The child will still have to pay a minimum 5% deposit.

Option 1
Using your savings as security
You'll need to deposit cash into one of our savings accounts (with the exception of our fixed rate, regular saver and ISA accounts), which will be used as additional security on the mortgage. The savings will still earn interest in the normal way, but the cash must remain in the savings account until such time as the security is no longer needed.
Option 2
Using your property as security
Instead of using your savings as security, we will take a legal charge over a suitable property for the length of the mortgage, or until such time as the security is no longer needed.

  • There are other conditions required to qualify for this product but our mortgage advisors will talk through everything in detail with you at the time of your mortgage appointment.
  • For more information, call 01228 403141 or click here to book an appointment online.

Where We Lend

We provide mortgages on properties throughout England, Scotland and Wales. Some of our mortgages are only available on properties in our branch operating area.

Our operating area is Cumbria (all CA and LA postcodes), South-West Scotland (all DG postcodes and TD9), West Northumberland (NE46-49) and North Lancashire (all PR, FY, LA AND BB1-3 and BB5-7).

Use our Mortgage Calculator to find out which mortgages are available to you.

Mortgage Calculator

Hints and tips if your child is thinking of buying a home

Looking for a property and owning a home is an exciting feeling, but the reality remains that buying a home is a major investment and means careful research and planning is important. If your child is planning to buy, here are some useful tips to help them.

Forward planning
Before they make the decision to buy, work out how much they can afford, by speaking to a mortgage advisor. An early meeting with a mortgage advisor will be of real help
Get saving
First Home Saver
Encourage them to start saving early. We've two great savings accounts designed specifically to help save for a deposit, a Help to Buy ISA and First Home Saver.
Research
Research prices of comparable properties and make sure they've a realistic budget for any required expenditure, planned and unplanned
Look at budgeting
Budgeting Calculator
Using tools such as the Money Advice Service’s online budgeting calculator is a simple way to get a general idea of your budget
Mortgage Calculator
Mortgage Calculator
Our online mortgage calculator is a straightforward tool, which can tell you how much they could expect to pay on their mortgage.

We've set out some information below which you and your child might find useful.

SAVING FOR A DEPOSIT

Two savings accounts designed specifically to help your child save for their house deposit

Help To Buy ISA
If you’re saving for your first home, our Help to Buy: ISA could make a big difference
Help To Buy ISA
In addition to an extremely competitive interest rate, the government will pay a 25% bonus on your final balance when you buy your first home
First Home Saver
To help first time buyers save for a deposit
First Home Saver
Save up to £1,500 each month and, as well as a competitive interest rate, we’ll give you £250 cashback if you take a Cumberland mortgage

Understanding Mortgages

  • What is a mortgage?
    • A mortgage is a loan, secured on a property, that is repaid with a predetermined set of payments over an agreed period of time.
    • The amount you borrow will depend on your income, outgoings and your ability to pay it back.
    • Borrowing for the first time you will need a deposit to put towards the property, which is usually at least 5% of the total cost of the property. Home movers generally use the equity in their property as the deposit.
  • Types of mortgage

    There are a number of different types of mortgage. The main types are:

    Fixed Rate

    With a fixed rate mortgage, your interest is fixed for an agreed period. During this period your monthly repayments stay the same so you know exactly how much you’re going to pay each month for a set amount of time. Even if interest rates go up, you will continue to pay the same amount each month, but if they drop your payments won’t fall. Most lenders charge an initial fee for arranging a fixed rate mortgage and if you repay all or a significant part of your mortgage before the end of the fixed period, an early repayment charge is likely to apply.

    Variable Rate

    Your interest is a set percentage above or below a particular rate for an agreed period of time. If you have a variable rate mortgage your payments will go up or down whenever the rate it is tracking goes up or down. These mortgages usually track either the Bank of England base rate or the lender’s own standard variable rate. Most variable rate mortgages have arrangement fees and early repayment charges.

    Offset

    An offset mortgage uses the interest you would normally earn on your savings and/or current accounts to reduce the amount of interest you pay on your mortgage. This means you could save money and repay your mortgage sooner.

  • Repayment options
    Repayment (Capital and Interest)

    Each payment is made up of both capital (the amount that you borrowed) and interest. This means if you make all of the required payments during the term of the mortgage, your loan is guaranteed to be repaid on time. The amount you owe also reduces each month and you are not dependent on the performance of an investment plan for the repayments of the capital borrowed.

    Interest Only

    All that you are paying back is the interest. You would need to make separate arrangements to repay the amount you borrowed at the end of the term. Normally, this would mean making a separate payment to an investment plan. This type of mortgage offers a lower monthly payment to your lender as you are only paying the interest (you still need to have a repayment strategy to repay the amount borrowed at a point in the future).

    
    

    You need to think carefully about which method will suit you best. A mortgage advisor will take you through the pros and cons of both and recommend what’s best for you.

  • Choosing your mortgage

    When you start looking at mortgages the choice can seem overwhelming. How can you possibly know whether you’ve got the right mortgage?

    Simply put, the right mortgage is the one that is best for your own personal circumstances. The reason why there are so many mortgages available is that everyone’s needs are different. The easiest way to find out which mortgage is best for you is to talk to someone that you trust will give you good advice.

  • Where do I start?

    One of the first questions you should ask yourself when you start looking for a mortgage is how you’re going to pay it off. Most borrowers opt for a repayment mortgage (referred to as Capital and Interest) but you can also choose an ‘Interest Only’ mortgage if you have another means of paying back the initial loan amount.

  • Insurance

    As a condition of any mortgage you will need to ensure that the property is adequately insured (e.g. Building Insurance), however, this insurance does not have to be arranged through us.

THE STEPS TO BUYING YOUR FIRST HOME

  • Forward planning

    Unless you’ve already got your deposit you will need to start saving. The more the better, but you should aim to save at least 5% of the price of the property. If you can save 10% or more you're likely to get a better mortgage deal as you'll be borrowing much less.

    To help you save for your first home we have two specially designed savings accounts. Both offer really competitive interest rates and special terms for first time buyers. Take a look at our Help to Buy: ISA and our First Home Saver accounts.

  • How much can I borrow?

    It’s natural to start looking for property as soon as you’ve made the decision to buy. However, before you start looking in earnest make sure you know what you can afford. One of the biggest mistakes you can make as a first time buyer is to find your dream home and then discover you can't get the mortgage you need.

    We know that choosing a mortgage isn’t as exciting as looking for a new home, but an hour spent with one of our mortgage advisors will put you in a great position to buy. You’ll know exactly what you can borrow and what it will cost. Being prepared can also put you in a stronger buying position as the seller will see how serious you are.

    You can get an initial idea of costs using our mortgage calculator but if you want to know exactly what you can borrow, arrange an appointment with one of mortgage advisors. We'll have the kettle on when you come in.

  • Looking for your new home

    You might already be looking. If you haven’t yet, the easiest way to keep up to date with new properties coming to the market is online. Websites like Rightmove and Zoopla are used by most estate agents and there’s obviously the websites of the estate agents themselves. Registering with estate agents should also ensure you get to know quickly when a new property that matches your requirements comes on the market. Have a look at the properties Cumberland Estate Agents has available.

    Of course, you can see the details of properties online but there’s no substitute for actually viewing them. Have a look at as many as possible and you'll quickly see what you can get for your money. One will catch your eye sooner or later, but if it's the first one you see, make sure you have a look at some others to make sure it's the right one.

    When you’ve seen a property you like go back for a second viewing. It’s amazing what you miss on your first visit. Try visiting at a different time of day to see what the noise and traffic are like. Concentrate on the things that are really important to you and, if you can, take a friend or family member who may spot things you miss. Take your time and ask plenty of questions.

  • Making an offer

    So you’ve found the property and you know you can afford it, it’s time to make an offer.

    In England, most properties are sold by estate agents who prepare details of the property and quote a specific asking price. You can, however, offer whatever you want for the property. A small number of properties in England are sold by sealed bids or at auction. If the property you are interested in is being sold by either of these methods, you should contact one of our mortgage advisors well in advance so that they can explain the important differences in the process. The process of buying also differs slightly in Scotland.

    Remember, as a first time buyer you do not have a property to sell, which might give you an advantage over other potential buyers as you should be able to buy more quickly. If you have already been in to see us and have a Cumberland Mortgage Affordability Certificate, then this is an even better indication that you are ready to move and could be the deciding factor if you are bidding against someone else.

    If your offer is accepted, the estate agent will usually let you know quickly and you’ll then need to instruct your solicitor/conveyancer to undertake the legal work. You’ll also need to let your mortgage advisor know that you’ve had an offer accepted so the mortgage process can start.

  • Patience and pay-off

    You’ll need to be patient at this point. (We know that’s easier said than done!) The process of buying a house involves quite a bit of paperwork. You’ll need to complete your mortgage application and your advisor will then instruct a valuation. Your solicitor or conveyancer will also begin liaising with the seller’s solicitors to complete the required legal documents. Be aware that if you’re involved in a chain (where the person you’re buying from is buying another property), the process can take a little longer as there are more people involved.

    If you’ve an idea of when you’d like to move in let the seller and their solicitor know as early on in the process as possible. Realistically, completion (when you get the keys and you can move in) can take anywhere between 4 and 12 weeks but this will depend on a number of factors. The completion date will usually be agreed a couple of weeks or more in advance in order to give everyone time to plan the move.

    Completion will take place when the seller's solicitor confirms they have received the money and the legal paperwork is finalised. It's at this point you can collect the keys and it’s time to start life as a home owner. Enjoy!

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AN AWARD WINNING MORTGAGE PROVIDER

Here are some of the recent awards we have won for our mortgage deals

MONEYFACTS FINANCE AWARDS 2016 Image
MONEYFACTS FINANCE AWARDS 2016
Regional Lending Provider of the Year
We won the Regional Lending Provider of the Year category at the 2016 Moneyfacts awards for offering the most consistently competitive products over the course of a year
MORTGAGE FINANCE GAZETTE AWARDS 2016 Image
MORTGAGE FINANCE GAZETTE AWARDS 2016
Best Regional Building Society
For the second year in a row and fourth in total, this title is awarded to the building society that has offered the most consistently competitive mortgage rates over a year
CHECK OUT OUR OTHER AWARDS Image
CHECK OUT OUR OTHER AWARDS
Have a look at our trophy cabinet
See Our Awards
We have won many more awards in recent years, including accolades for our mortgage deals, customer service and fraud protection services. You can read about them here

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Your mortgage is secured on your home. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.