The Times - Portfolio Therapy - How can I help my child buy a flat?
Michael Sleight from Castle Donington in Leicestershire, wrote into The Times to ask for help about the best way to help his son Alex, 23, on to the property ladder.
Alex recently finished university and has moved back into the family home. He is on the graduate trainee scheme at Enterprise Rent-A-Car earning £21,000 a year, and expects his salary to rise soon. He has £6,000 savings.
THE EXPERTS
Aaron Strutt from Trinity Financial, a mortgage broker told The Times:
“There are two-bedroom homes within a few miles of Castle Donington for roughly £150,000. If Michael and his wife were willing to remortgage to release cash from their property, they could give more than £40,000 as a deposit and Alex may be able to secure a large enough mortgage on his own.
“It is possible to borrow about four and a half times his £21,000 salary through lenders such as Nationwide Building Society — provided Alex does not have any credit cards or loans. Michael and his wife should be able to pay off the loan relatively quickly and both mortgages would be at competitive rates. One could be interest-only.
“If they did not want to release equity from their home, there are options, but at higher than standard mortgage rates. Bath Building Society has a Rent a Room mortgage where rental income could boost the loan size.”
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