Could your Child help you get a bigger mortgage?
1st April 2021
After months of work behind the scenes we’re delighted to launch a world first in mortgage lending – the Offspring Mortgage Guarantee scheme.
For years parents have helped their children on the property ladder by standing as guarantor, but in recent years guarantor mortgages have become harder to get, mainly because lenders want the guarantor’s earning potential to last the duration of the mortgage term. With older parents and the typical mortgage term being 30+ years, this has made guarantor mortgages increasingly difficult.
So we’ve flipped the whole idea of a guarantor on its head and developed a product that allows you to use your child as guarantor. The child must be at least 12 years old and we’ll calculate how much extra you could borrow by asking for a copy of their latest teacher-predicted grades from their school. The higher their predicted grades, the more you might be able to borrow on your own mortgage!
The thinking here is that brighter children are likely to earn more as adults, so we factor in their future earning potential to support your mortgage borrowing now. Even if it’s a bit of a stretch right now, your child should be able to chip in with the monthly mortgage payments once they start work. If any arrears have built up then the child has their whole working life ahead of them so it should be possible to spread them out over many years and keep the payments affordable.
Mortgage Medics’ MD Sam Murphy said: “These days child labour is generally frowned upon, but we think that by using their predicted future earnings we can tap into a valuable source of lending for parents. All the children have to do is carry on at school and then help out their parent(s) when they’re older. It’s a great way to introduce children to the world of finance and home ownership at a young age.”
If you’d like to find out more about the OMG scheme please get in touch and our OMG specialist Avril Fuller will be happy to help.