Family Mortgage FAQs

• The borrower is the legal owner of the property
• Family members who provide support do not have rights to the borrower’s property.

No, the Family Mortgage isn’t only for first time buyers. If you already own a home and need some help to move to a bigger or different property, you can still get a mortgage with us. The home you have with the Family Mortgage needs to be your only residence.

The minimum property value is £75,000. For full details on properties we will and won't accept, along with other criteria we consider, read through our lending criteria.

You can apply to us directly by speaking with one of our dedicated Mortgage Advisers, or you can apply through an alternative mortgage adviser, if you already have one.

To help us process your application quickly we've produced a checklist for Owner Occupier mortgage applications which highlights the minimum documents we require on receipt of your application.

No, a borrower’s deposit is not required as the family security can be used to support the mortgage.

If the borrower has a deposit, the combined value of the borrower’s deposit and the family security must not exceed 20% of the property’s value.

Examples of this are:

• No deposit = 100% loan with 20% savings and/or property security required
• 5% deposit = 95% loan with 15% savings and/or property security required
• 10% deposit = 90% loan with 10% savings and/or property security required.

• The minimum loan amount is £60,000
• The maximum loan amount is £750,000
• More information can be found on our mortgage lending criteria page.

There are no application or product fees for the Family Mortgage.

Yes. If using property as security, a valuation will be required to determine if there is enough equity in the family member’s property to add a Collateral Charge. They will also be required to obtain independent legal advice, for which they will be charged a fee. Independent legal advice is also recommended for family members providing savings as security.

The security provided by family members is released subject to the following conditions:

• The borrower’s mortgage payments are up to date
• The borrower hasn’t missed any monthly payments in the last 12 months
• The borrower hasn’t fallen behind by the equivalent of two monthly payments at any time in the past two years
• We haven’t asked for repayment of the mortgage in accordance with its terms and conditions. This will only occur if there is a serious breach that is unrelated to making the monthly payments, such as the borrowers ceasing to use the property as their main residential home.

If the above conditions are not met, the family member’s security could be at risk. For example, we may need to repossess and sell the borrower’s property and potentially use any security provided by family members, in order to repay the loan.

Family members will be required to obtain independent legal advice before entering into the arrangement, to ensure they understand their responsibilities.

If the borrower’s property is sold for less than the outstanding mortgage balance (negative equity), the family member(s) may be required to cover any shortfall, up to the value of the security amount. All family members must obtain independent legal advice.

Any move will be subject to a review of the Family Mortgage and the security arrangements in place at that time.

If your circumstances change we’ll review your mortgage and look at your current loan to value (LTV), i.e. the amount of money outstanding on your mortgage compared to your total house value.

If you have a joint Family Mortgage with a partner and then separate, there are a few options available to you;

• If you both want to stay on the mortgage and both maintain the mortgage payments, you can continue to as per the current agreement until the end of the mortgage term.
• If you want to sell the property, you would need to follow the normal redemption procedures for a Family Mortgage, and any early redemption would be subject to ERCs.
• If you or your partner want to remain in the property and transfer ownership into your / their sole name, we would need to reassess criteria such as income, expenditure and affordability.

If your circumstances have changed and you’d like further information on what to do, you can contact our friendly Mortgage Service Team on 03330 140146 or email mortgage.service@familybsoc.co.uk

If your circumstances change please contact our friendly Mortgage Service Team on 03330 140146 or email mortgage.service@familybsoc.co.uk

It's important you let you know of any changes as soon as possible.

The death of a security provider doesn’t change the Family Mortgage arrangements. The estate of the deceased person remains bound by the terms of the Family Mortgage and the charge given over savings and / or property remains in place. Alternatively, it may be possible to arrange appropriate life insurance to cover this eventuality – please speak to your adviser or contact us to be put in touch with one.

Family members may wish to review their Will to take account of the support being provided through the Family Mortgage and simplify administration of their estate. Please speak to your adviser or contact us to be put in touch with one.

Up to twelve family members can contribute. This can be a big help if you're perhaps buying with a partner and both families want to help.

Any money used as security for the mortgage will always remain in separate accounts, not combined into one account.

• Up to four individual Family Security Accounts can be opened:
  • Accounts can be opened individually for each supporting family member, or
  • Jointly with up to two family members named per account.
• We'll accept up to two properties as the security for the mortgage. If the property is jointly owned, then both owners must consent to this arrangement.

Family members’ liability

• Family members are liable for the value of the security they provide
• Liability is proportionate to each family member’s contribution whether it’s property or savings
• All family members will be required to take independent legal advice
• Provided mortgage payments are kept up to date and there is no other significant breach of the mortgage, after five years the security is released.

A Collateral Charge occurs when a family member agrees to let the Society use their property as additional security for your loan. This arrangement can help you access the loan you need while giving everyone peace of mind that the loan is supported by additional security. However, it’s important that all parties fully understand how it works and the responsibilities involved.

Yes. If using property as security, a valuation will be required to determine if there is enough equity in the family member’s property to add a Collateral Charge. They will also be required to obtain independent legal advice, for which they will be charged a fee. Independent legal advice is also recommended for family members providing savings as security.

The security provided by family members is released subject to the following conditions:

• The borrower’s mortgage payments are up to date
• The borrower hasn’t missed any monthly payments in the last 12 months
• The borrower hasn’t fallen behind by the equivalent of two monthly payments at any time in the past two years
• We haven’t asked for repayment of the mortgage in accordance with its terms and conditions. This will only occur if there is a serious breach that is unrelated to making the monthly payments, such as the borrowers ceasing to use the property as their main residential home.

If the above conditions are not met, the family member’s security could be at risk. For example, we may need to repossess and sell the borrower’s property and potentially use any security provided by family members, in order to repay the loan.

Family members will be required to obtain independent legal advice before entering into the arrangement, to ensure they understand their responsibilities.

No. The security remains in place for five years, unless the borrower pays the mortgage back in full. Early Repayment Charges (ERCs) apply.

Any move will be subject to a review of the Family Mortgage and the security arrangements in place at that time.

If a family member moves home the Collateral Charge can be transferred to their new property – there may be some fees to transfer this charge.

The death of a security provider doesn’t change the Family Mortgage arrangements. The estate of the deceased person will remain bound by the terms of the Family Mortgage and the charge given over savings and/or property remains in place. Family members must obtain independent legal advice.

Family members providing security may wish to review their Will to take account of the support being provided through the Family Mortgage and simplify administration of their estate. Alternatively, it may be possible to arrange appropriate life insurance to cover this eventuality – please speak to your adviser or contact us to be put in touch with one.