14 December 2016

Multi-generational living on the rise as families club together

RISING PROPERTY PRICES AND STAGNANT SALARIES COMBINED WITH OLDER GENERATIONS SURVIVING FOR LONGER AND REQUIRING CARE, IS LEADING TO A GROWTH IN MULTI-GENERATIONAL LIVING. LENDERS ARE RESPONDING TO THIS GROWTH IN DEMAND WITH MORE FLEXIBLE PRODUCTS ALTHOUGH THERE IS STILL SOME WAY TO GO.

Some lenders will take up to four applicants on one mortgage as well as taking up to four incomes into account. Beyond that borrowers will encounter systems issues so a time-consuming manual approach may have to be taken by the lender. An independent mortgage broker will help you identify those lenders likely to be most sympathetic to your situation.

Working with three generations on one mortgage, while possible, is likely to be unworkable. For example, if the grandparents are party to the mortgage, then borrowing potential could be limited by their reduced income in retirement and possibly the lender’s age restrictions.

Lenders routinely ask for details of the dependants living in a property. If one generation does not contribute financially, then the lender could make assumptions about how their lifestyle is afforded i.e. the non-earning dependant becomes a financial drain on the others, which will affect the amount you can borrow. It is a trickier area so it is worth seeking advice from a broker such as SPF Private Clients as to the best way of structuring the finance.

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