Virgin Money USA has launched a new family mortgage in the US which enables friends and families to lend to each other.
Industry commentators in the UK believe Virgin’s new service is an interesting development and could be introduced in the UK.
The service allows family members or friends to lend money to each other at agreed rates of interest on commercial terms.
The company administers and manages the loans, arranging collateral, interest deductions and repayments, with the rate charged typically to 2 to 3 percentage points below what the borrower could find in the commercial mortgage sector.
As part of the deal, Virgin earns an up-front fee plus ongoing charges. Fees start from $100 for a personal loan and rising up to $699 for a mortgage.
BM Solutions head of specialist lending strategy Steve Sandiford says he thinks the service is an interesting development in the mortgage market and questions whether it was something that could be brought to the UK mortgage market.