This is forward thinking in difficult times, and I applaud them for that, but surely the returns on this 20% would be a hell of a lot higher for the friend/family member if they simply put it down as a deposit for them. Aren't they effectively saying that they expect house prices to continue to fall for 42 months? If it was me I'd use the 20% for the deposit, unless I am missing the point?
21.5.09
A quick update...
I've just been reading through various mortgage article, and caugh a snippet talking about how Lloyds TSB has launched a mortgage product which allows first time buyers to borrow an otherwise impossibly hard to come by 95% of a property's value... providing a friend or relative locks away a further 20% of the value in a savings account for 42 months.
This is forward thinking in difficult times, and I applaud them for that, but surely the returns on this 20% would be a hell of a lot higher for the friend/family member if they simply put it down as a deposit for them. Aren't they effectively saying that they expect house prices to continue to fall for 42 months? If it was me I'd use the 20% for the deposit, unless I am missing the point?
This is forward thinking in difficult times, and I applaud them for that, but surely the returns on this 20% would be a hell of a lot higher for the friend/family member if they simply put it down as a deposit for them. Aren't they effectively saying that they expect house prices to continue to fall for 42 months? If it was me I'd use the 20% for the deposit, unless I am missing the point?
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