Parents 'have choice' when helping with mortgage

22-Feb-2008

First-time buyers may be interested to learn that there are new products available that enable their parents to make contributions toward their mortgage, according to an expert.

The financial advice group Bestinvest has noted that, while many parents assist their children with mortgage payments, most prefer to keep the property in the child's name in order to encourage independence.

Commenting on mortgages that allow parent's income to assist payments, Peter O'Donovan, mortgage manager for Bestinvest, said: "[The parents] have the choice, really, as to whether they put a big lump sum in to assist the child in borrowing the money; or they can use their income to assist the child in paying off the mortgage."

Mr O'Donovan added that, where previously the parents would just lay down a lump sum for a deposit, there are opportunities for parents to be involved in the mortgage if they wish to be.

However, as assisting the child's income means the parent can become party to the mortgage itself, most prefer to just supply the deposit, he said.

In related news, Cheltenham & Gloucester has launched a new product that enables borrowers to switch from tracker-rate to fixed-rate free of charge.

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