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Parent Assisted Mortgage Scheme (PAMS) with Guarantor
Our Parent Assisted Mortgage Scheme was launched in 2008 to great fanfare. This type of mortgage will suit parents who want to help their children get onto the property ladder, but they don't have the spare funds for a full deposit.
We have now added a guarantor element to the scheme but it is different to normal guarantor arrangements in that the guarantor will be expected to assist with the monthly mortgage payments from the outset. We will still require a collateral charge over the parental property for loans above 80%.
If you think this Mortgage may be right for your clients then get in touch with our Mortgage Sales team on 01225 475702 or via email at intermediaries@bibs.co.uk to find out more.
95% Parent Assisted Mortgages
Product Name |
The overall cost for |
Rate structure based |
Availability |
Flexibility |
Fees |
Early Repayment Charges |
---|---|---|---|---|---|---|
3 year Residential
|
5.2% APRC |
3.44% variable for 3 years followed by Standard Variable |
Purchase 95% Loan To Value (LTV), |
Overpayments up to 20% of the capital |
|
3% in years 1 & 2 , 2% in year 3, plus a Closing Administration Fee (currently £100). |
80% Parent Assisted Mortgages
Product Name |
The overall cost for
|
Rate structure based
|
Availability |
Flexibility |
Fees |
Early Repayment Charges
|
---|---|---|---|---|---|---|
3 Year Residential
|
5.1% APRC |
3.24% variable for 3 years followed by Standard Variable Rate (SVR), currently |
Purchase 80% Loan To Value (LTV), |
Overpayments up to 20% of the capital |
|
3% in years 1 & 2, 2% in year 3, plus a Closing Administration Fee (currently £100). |
An example: A mortgage of £304,000 taken out for a period of 33 years on a repayment basis. Monthly instalments: £1,385.29 per month for 35 months, followed by £1,714.56 per month for 360 months. Total amount payable, including fees: £585,613.87 Total amount of credit: £235,000 The total amount payable includes a product fee £1216.00, valuation fees £395, administration fee £125, collateral valuation fee £125 closing fee £100 and completion fee £75. The example relates to Product Code UDD006, is based on a typical mortgage and assumes that fees are not added to the mortgage. Please ask for a personalised illustration for your own particular requirements. |
We have no current plans to withdraw these products but they may be withdrawn without notice. Ask for a personalised illustration.
PAMS with Guarantor Lending Criteria
Loan size |
Minimum £50,000, Maximum £350,000. |
---|---|
Property |
Minimum Value: £100,000. Must be in England or Wales. |
Applicant |
Age: Minimum 21, Maximum 85, subject to income in retirement. |
Income |
Minimum income of £20,000, no minimum period of employment but must have passed probation, or self employed for at least 3 years Affordability is calculated on the applicants’ and guarantor’s income and expenditure. It is likely that the guarantors will need to assist with the monthly payments from the outset and, in any event, they must be able to support the total borrowing plus their own mortgage, and any other commitments they may have. |
As a guide, we will take the guarantor’s gross annual income and then apply a deduction for the annual amount paid towards any existing debts or other financial commitments. We apply the following multipliers to the amount remaining. In any event, the loan will be capped at 6x the applicants net sustainable income.
Income After Deductions |
Sole Borrower |
Joint Borrowers |
---|---|---|
£20,000-£50,000 |
4.25x |
4.25x |
Over £50,0000 |
4.5x |
4.5x |
These multiples are for guidance only and do not guarantee that we will lend the amount indicated. We will carry out a full assessment of your income and expenditure
PAMS Mortgage Lending Information
Underwriting: |
We take a flexible approach to underwriting and will consider each case on its merits. We do not credit score. The actual rate and APRC for the case will depend on the circumstances of the case and our assessment of the risk. |
---|---|
Loans above 80% Loan to Value: |
Mortgages above 80% ltv will require additional security in the form of a collateral charge over the parental property. This means that it may be more difficult to raise capital against the equity in the parental home and in the event of default, their home may be at risk. Maximum total of charges over additional security must not exceed 70% of its value. |
Collateral Valuation |
If the collateral security is standard construction and is visible from the road, the valuer will endeavour to carry out a drive-by-valuation and this will be charged at £125. If the valuer is unable or unwilling to carry out a drive-by-valuation, or the property has a current value of >£500,000, we will require a standard mortgage valuation to be carried out and this will be at our usual scale fee based on the value of the property. |
Procuration Fee |
We will pay an uncapped procuration fee of 0.35% of the amount borrowed to directly authorised and regulated intermediaries on completion of the |
If you have a client you think may benefit from our flexible service, please call us on 01225 475702 to discuss the details. We will email you the application forms and all the other documentation you will need. There is no need to register with us to use this service.
For more information about our range of mortgage products contact the Mortgage Sales team on 01225 475702 or via email at intermediaries@bibs.co.uk