Guarantor mortgages enable first time buyers to borrow more than standard income multiples would allow with help from a guarantor. Lenders will normally require that your guarantor be your legal guardian, and most, though not all, will only allow a single guarantor.
The guarantor’s income, rather than the purchaser’s income, is used to guarantee the mortgage borrowing. However, the mortgage is held solely in the purchaser’s name, with the guarantee being taken over a percentage of the property’s value.
As the guarantor’s legal position is quite complicated, independent legal advice must be taken. An important point to note is that, when calculating the amount you can borrow, the lender will multiply your guarantor’s income in the normal way, and then subtract any outstanding credit commitments your guarantor may have.
If, for example, your parents have a large mortgage, this may be a hindrance. These schemes are designed for those who have recently graduated, or who are studying for professional qualifications, as the purchaser’s income should potentially rise sufficiently to cover the mortgage in the coming years without the need for a guarantor.
Guarantor mortgages have complex criteria, so it is essential that you seek independent legal advice and specialist mortgage advice at the outset.
Contact us today and we will explain the guarantor mortgage process to you in full and give you quotes on the most suitable products that would be available to you.
As professional mortgage brokers, with access to a large number of lenders, we can source from the whole of the marketplace to help you find the most competitive quotes considering your individual situation and individual preferences.