It will now allow borrowers to raise additional capital for gifting when remortgaging
Longer-term residential lender April Mortgages has announced an enhancement to its capital raising criteria, aimed at assisting first-time buyers in the UK.
The lender will now accept applications from borrowers seeking additional capital for gifting purposes when remortgaging.
According to April Mortgages, gifting has gained importance in the UK housing market, as rising house prices and increasing household bills have made it more difficult for prospective buyers to save sufficient deposits.
It added that many first-time buyers now rely on financial support from family members, a trend supported by research from Legal & General, which found that over 314,000 house purchases in 2023 were aided by the Bank of Mum and Dad, with gifts averaging more than £25,000.
Under the new criteria, borrowers can borrow up to 4.5 times their income for gifting purposes.
The move follows April Mortgages’ recent decision to increase its maximum loan-to-income (LTI) caps to up to six times income for first-time buyers, aiming to make their products more accessible to a broader range of borrowers, particularly those entering the property market for the first time.
April Mortgages offers fixed-rate mortgages ranging from five to 15 years, with options available up to 95% loan-to-value (LTV). As borrowers reduce their LTV — either through repayments or house price appreciation — their interest rate decreases, providing added financial stability.
“Home ownership has become harder to achieve for would-be buyers in recent years, as it has become more challenging to save the required deposit,” said James Pagan (pictured), director of product and portfolio management at April Mortgages. “By expanding our capital raising criteria, we are making it easier for loved ones to gift deposits while also benefiting from the vital peace of mind our products provide.
“Combined with our LTI caps increase for first-time buyers, April Mortgages is helping more borrowers to not only purchase a home but stay in it for the long term.”
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