Your questions answered

Services

What is the Generation Home Agreement?

The Generation Home Agreement is our version of a “Deed of Trust.”  We help you to customise it to work for you. It is designed to protect everyone's financial interests, establishing the legal parameters for buying, owning and selling together.

Is there a fee for using the Generation Home Agreement?

No, this service is provided free of charge.

What is the Generation Home Ledger?

It’s a record of the ownership of your property. This can be useful if you are buying with help from family (and want to keep your finances separate) or buying a home together with friends.

Over time, the more you pay the more of the property you own.

Does the Ledger capture changes in house price to ensure that ownership adjustments are made at fair market value?

You get to choose whether to take account of house price changes over time.

How do you treat the capital and interest components of my payments for the purposes of the Ledger?

We do not distinguish between interest and principal repayment. Any £100 paid towards the mortgage is worth the same as £100 contributed to the deposit.

Products

What type of mortgage products do you offer?

All our mortgage products are for people buying a new home or refinancing a mortgage on their existing home. These are traditionally called “Owner-Occupied” mortgages because the owner lives in the property as opposed to letting it out.

Does Generation Home offer buy to let mortgages?

No, we don’t and we never will. That’s because we aim to help our customers become homeowners, not help landlords to create more tenants.

Do I need to pay a fee when I get my mortgage?

That’s up to you. Each of our products comes with a fee-based and a fee-free variant. Products with fees have a lower interest rate than products without fees. Your Mortgage Adviser will help you to decide which option is right for you.

Do you offer both capital repayment and interest-only mortgages?

We only offer mortgages on a capital repayment basis, meaning that you pay down your loan with each monthly instalment. We think of this as being like a “built-in” savings mechanism as it builds your housing wealth in the long-run. Interest-only mortgages don’t have this feature so we don’t like them.

Do you offer fixed and variable rate products?

Yes, we offer 2, 3, 4 and 5-year fixed rate products and a lifetime tracker product.

Home Investor

What is the role of a Home Investor?

As a Home Investor, you can make a financial contribution to a home buyer’s deposit in return for a financial interest in their home.

What are the advantages of being a Home Investor instead of just gifting?

This is a personal decision for everyone, but there are some key advantages to investing over gifting. Here are a few:

⦁ You may need or want the capital back in the future.

⦁ You preserve optionality as you can always gift part or all of your stake later.

⦁ You may be wary of a beneficiary breaking-up with a partner and seeing the money go out the door with them.

⦁ You may not like the idea of giving a handout but are willing to provide a necessary leg-up to get them started.

⦁ You may be able to help multiple children onto the property ladder with the same pot of money.

How is the investment structured?

You contribute to the deposit via an equity loan, which is an agreement between you and the home buyer. The balance of the loan increases or decreases with changes in the house price, so you have the economic exposure of a homeowner.

We manage the investment for you, providing the legal structure and controlling the flow of funds for investment and repayment.

What are the Stamp Duty implications of being a Home Investor?

None. You do not attract a second-home rate of Stamp Duty as you are not classified as an owner of the property. Also, if you are helping a First-Time Buyer, they will retain their preferential Stamp Duty treatment.

As a Home Investor, will I appear on the property title?

No, you do not appear on the property title as a Home Investor. Your interest is managed by an equity loan agreement.

Home Booster

What is the role of a Home Booster?

Home Boosters help buyers borrow enough to buy a home. They do this by going on the mortgage with them, even though they don't plan to be resident in the property.

As a Home Booster, do I have to pay every month?

No, you can just be on standby to help so long as the other borrowers are making monthly payments in full. You may choose to contribute regularly and, if you do, we’ll keep account of your payments separately.

Can I be a Home Booster on more than one mortgage?

Yes, you can be a Home Booster for more than one person, but this will be subject to your financial position.

As a Home Booster, am I on the mortgage?

Yes, you are on the mortgage and responsible for the mortgage loan alongside the other borrowers.

Is a Home Booster the same as a Guarantor?

No, but the roles are similar. With a guarantor mortgage, guarantors become liable for the mortgage debt if the borrower can’t make the repayments.

Criteria

What are your income multiples?

We don’t use income multiples to determine your loan amount. Instead, we carefully consider each applicant’s income, expenditure and credit profile to determine a maximum amount that we will lend.

Do you accept working visas?

No, all applicants must have the permanent right to reside in the UK.

What proof of income do you accept?

Ideally, we will use Open Banking to assess your income. If you prefer, you can also provide proof of income via the documents listed here.

I am a UK Resident, but work abroad. Would you lend to me?

In most cases, yes, but this may depend on the nature and term of your contract abroad.

What kind of home can I buy with a Generation Home Mortgage?

We lend against nearly all types of property – properties that we cannot lend against are listed here:

Properties with a floor area of less than 35m2.

Properties with a plot size in excess of 5 acres.

Properties listed under the Housing Defects Act (valuers will advise us if the property falls within the Act).

Steel-clad houses.

System-built concrete construction.

Prefabricated/(pre)reinforced/poured or shuttered concrete construction.

Easi-form construction (except by Laing from 1945 onwards).

Mundic block property.

Properties built on contaminated land.

Timber-framed property with cavity wall insulation unless installed during construction.

Multi-ownership properties.

Shared ownership properties.

Working farms, smallholdings and crofts.

Where a purchase of the property was completed within the last 6 months.

Co-Owning

Do we all have to live in the property?

No, not everybody on the mortgage needs to live in the property, but at least one person named on the mortgage must be resident.

Is there a maximum or minimum number of people that can be on the mortgage?

There can be between 1 and 6 people on the mortgage.

Is there any rule for how we split the deposit and mortgage repayments between us?

No, how you split the deposit and repayments is entirely up to you.

How do we coordinate our mortgage repayments?

We can collect payments from each of your separate bank accounts. You tell us how you want your payments divided on day one and you can amend this anytime through the HomeOwner Platform, requesting consent from the other borrowers to any changes.

How do we keep track of what everybody has contributed?

You can track each borrower’s financial contributions in real time in the Generation Home Ledger, including initial deposit contributions and ongoing monthly repayments.

Applying

Must I have identified a property before applying for a mortgage?

No, you can begin your application when you are still exploring your possibilities. We can give you an indication of how much you will be able to borrow (called a Mortgage-in-Principle) to help you identify the perfect property.

What is a Mortgage-in-Principle?

A Mortgage-in-Principle (MIP) tells you whether and how much Generation Home would be prepared to lend you. You can get this before you complete a full mortgage application and it will give you credibility with estate agents and sellers when you submit an offer on a property. Some people refer to this as a Decision-in-Principle (DIP) or a Lending Certificate.

What documents do I need to apply?

We will need to verify your identity, your income and source of deposit (this is for Anti-Money Laundering checks). It is helpful to have these ready before applying. To verify your identify, please have a passport or driving licence to hand. The simplest way to verify your income and source of deposit is through Open Banking. This means that you give your bank permission to share this information with us electronically. Alternatively, you can provide us with payslips and bank statements. If you are self-employed, we will ask for tax returns or business accounts. Your source of deposit can also be verified by bank statements.

WORKING TO MAKE HOME OWNERSHIP POSSIBLE

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Your home may be repossessed if you do not keep up repayments on your mortgage.