Sams helpful to first-time buyers
by Gill Montia
Zen Financial Services, the independent financial adviser, is advising first-time buyers to investigate shared appreciation mortgages, or Sams.
According to Zen, this type of mortgage can provide a real opportunity for people struggling to save a deposit and get a foot on the property ladder.
It can also be helpful to those will poor credit histories.
A shared appreciation mortgages does not involve shared ownership but allows the lender to take a share of the profit when the property is sold.
They were first introduced by the Bank of Scotland in 1996 and a number of other providers have now entered the market.
Under the terms of the mortgage, a borrower is likely to pay a below normal rate of interest to the lender, on the understanding that the latter shares a proportion of the appreciation of the property.
According to Zen spokesman, Mike Pendergast, the average the amount the lender takes is between 15% and 25%.
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