Parents' Income Can be Counted in New First Time Buyer Mortgage
New scheme from Norwich and Peterborough building society lets parents' income be counted in mortgage assessment
17th August 2005
Parents will soon be able use their income to boost the size of mortgage their children can take out, under a new scheme launched by Norwich and Peterborough building society on August 22nd.
Under the 'Lend a Hand' program, which is available to first time buyers only, the buyers need only earn enough to be able to take out a mortgage for 75% of the value of the house they want to buy. The amount borrowed can then be boosted by an amount up to the size of the parent's salary.
The parent will not actually have to pay anything to the building society, and will not have any ownership rights in the property, but will become jointly responsible for the debt - potentially having to take on the repayments if the child defaults.
Once the child's earnings have increased by enough to cover the full mortgage amount, the debt can be transferred to them in total and the parent's liability will end.
The new scheme is available on all of the building society's mortgage products, apart from their offset mortgage.
Read More: Money Guardian : New first-time mortgage counts parents' income
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