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Guarantor mortgage??
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# 1
Old 03-10-2008, 4:01 PM
MoneySaving Newbie
Join Date: Oct 2008
Location: West Sussex
Posts: 11
Default Guarantor mortgage??

** Posted this under "House Buying" area & then saw this section too....**

Hi everyone,

Just looking for some advice or pointers.......

My friend and I bought a two bedroom flat 4 years ago for 157k. I provided the deposit of 18k and we used our combined salaries to raise the necessary mortgage. The repayments, purchasing costs and all other bills are split jointly between us (but my initial deposit percentage is protected by a deed of trust, so I technically have a 62% stake in the property).

My friend now wishes to move in with her boyfriend, so would like to sell her share and free up her name/ equity (such as it now is!) to join his mortgage when it comes up for renewal. Our current fixed rate deal ends in December and I would ideally like to buy my friend out and take on the whole mortgage (with a lodger to help with bills)

By December we will have 130500 outstanding on the mortgage and have just had the flat at somewhere in the region of 160-170k (estate agent valuations varied wildly, so that is a mid estimate). However, I can only afford about 95k on my current salary.

My father is willing to act as a guarantor for the remaining portion, but I'm finding it really difficult to get any information about guarantor mortgages. My current lender (Nationwide) have said that my father will have to prove he can afford the WHOLE loan, not just the portion about my salary multiples, plus they would only consider me if my salary is likely to increase sufficiently within 3-5 years to take on the whole amount (about a 10k increase).

Are there any other lenders who might still take a more flexible attitude in the current market?!? I have no debts at all, except for a student loan (which Nationwide didn't even take into account when we originally applied as FTBs) Is there a mortgage broker who specialises in these type of arrangments, or should I just give London and Country or Charcol a ring?

I really don't want to sell the flat in the current market as I have no reason to move other than not gaining the necessary finance and am quite happy to stay here and (hopefully) ride out the dip in the market. It would also save me thousands in trying to sell (at a low price) and then scraping back my deposit/ pay fees to buy a titchy studio on my own, with no scope for getting a lodger or room to grow!

Any advice or pointers would be most appreciated....... I am at my wits end trying to get my head round the current situation and where I can go for advice. :confused:

Miss Tigs

We were also originally misadvised by our solicitor and are facing a short lease problem, but don't even get me started on that....... A whole other post on that subject coming on!
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# 2
Old 04-10-2008, 12:32 PM
MoneySaving Convert
Join Date: Jul 2007
Posts: 183

I went to Countrywide (a broker in your high street estate agents) amongst other brokers.

Countrywide are by no means independent or whole of market... but they managed to get me a guarantor mortgage with Natwest, who unlike most others, just wanted the guarantor to cover the excess, as opposed to the whole amount.

Hope that helps!
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# 3
Old 06-10-2008, 3:43 PM
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Join Date: Sep 2008
Posts: 28

I have just got a guarantor mortgage with C&G so you could try them?
Or maybe Bristol and West who do a special parent and child mortgage, though don't know if their conditions would apply.
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# 4
Old 06-10-2008, 3:48 PM
MoneySaving Convert
Join Date: Sep 2008
Posts: 28

Another thing to consider is that because my Dad is 60 they would only give us a guarantor mortgage over 14 years. Because of this we have had to take it as an interest only mortgage as the cost of a repayment mortgage on 200k over 14 years was too much for us. Don't know if this applies to all guarantor mortgages, but it makes sense that they're not going to let my Dad be a guarantor until he's 90, as even if he's still around I'm sure he won't be working by then!
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# 5
Old 06-10-2008, 3:53 PM
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Join Date: Aug 2004
Location: London
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There are plenty of guarantor options available

The best option for you will depend on the exact details of your circumstances, but you should be able to find several options available to you, in order for you to keep your property
I am a Mortgage Adviser

You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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