Building your Tembo Plan
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A first time buyer trying to build up his deposit.
Tim has dedicated his life to studying a very specific animal - the brown frog. But this isn’t just a niche hobby, Tim’s a zoologist, and a lecturer at a University.
Frogs aside, Tim came to us at Tembo with a natural evolutionary need. After decades of renting, he was desperate to get on the ladder and begin building value in his very own home. Plus, the strains of lockdown meant a spare-bedroom-come-office was becoming a more urgent necessity. With a healthy salary and some additional income from consultancy work, Tim had been looking at properties around the £150,000 mark in the South East. The hiccup was that he didn’t have enough money saved for a deposit, and what’s more, he knew he would pay an increased interest rate for the higher LTV mortgages on the market even once he had saved between 5-10%.
Tim already knew that his mum Sandra was willing to help him get on the ladder, but that a gifted cash deposit simply wasn’t a possibility. Thanks to the magic of Google, while he was researching ways to unlock money from his mum’s property, Tim found Tembo.
After completing a Tembo plan, we could see that by unlocking around £36,000 from Sandra’s property with a boost in the form of a retirement interest only mortgage (RIO), Tim would be able to get an 85% LTV mortgage on his dream property. This means he could access a lower interest rate versus the +3% interest rates on offer for 90% mortgages, but most importantly - it meant he could get on the ladder.
Once the family had collectively decided on the exact boost amount (all Tembo customers, both homebuyer and homebooster have calls with their dedicated broker), we ran affordability checks, gathered the necessary documentation and began the two-part application. First up was Sandra’s booster mortgage. Sandra is retired, has fully paid off the mortgage on her home, and has good pension income. These are three big green ticks for a successful RIO.
As a RIO is a product specifically for over 55s, the lender will want to see that the homebooster has good pension income ahead of them. Our brokers will also check that the mortgage is at least 50% paid off, look to understand any other income and run standard credit checks. If you’re not over 55 but you’d like to become a homebooster, we could help you with alternate boost* products. Create a plan & start the conversation today.
Once we had the green light from the lenders for both Sandra’s homebooster and Tim’s homebuyer mortgage, Tim began his property search in earnest. Just a few months after Tim found us online, he had an offer accepted on a two-bed. Through using the boost, he was able to get on the ladder years before he otherwise could have, and his mum was delighted to lend a helping hand.
That’s Tembo in action, folks.
This is an example of a scenario that some of our customers have found themselves in and the potential solution.
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