Guarantor Mortgage

Mortgages with a Guarantor:

A Guarantor mortgage will enable a first time buyer to borrow more than standard income multiples would usually allow.

Lenders will normally require that your guarantor is a close blood relative, usually a Parent Brother or Sister. 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.

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.

Who should apply for a Guarantor mortgage?

These schemes are ideal 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. Lenders may also consider garantor mortgage applications where the applicant expects their income to rise substantially.

Guarantor mortgages can be very complex hence its vital they the buyer seeks advice. As the guarantor’s legal position is quite complicated, legal advice must be taken.

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Before applying for a mortgage or remortgage it's important that you understand what your existing commitments are and how much you can afford in repayments for your mortgage.

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