Parental help with first time mortgage

DrRusty

My parents have offered to help us get a mortgage, in the possible form of putting thier house up as a guarantee, not actual cash.

I remain confused as to whether this would be accpet and if so what form it might take and indeed the pitfalls (imeadate and in the furture) of gonig doen this route (i.e. how easy would it be to re-mortgage without the guarantee).

Any advise or words of caution gratefully accepted.

_Andy_

They would need to remortgage to 'release' the money for you to use.

happybroker

Some lenders are looking to help when parents are willing to get involved. The scenario you describe, however, wouldn't be acceptable.

To be a guarantor they would need to be able to afford the mortgage in their own right or they could release equity from the house and give that to you to use as a deposit (not lend and they would need to be able to afford their own new mortgage).

It would be worth speaking to a good whole of market broker, try and get a recommendation from friends or family.

CLAPTON

what exactly are you trying to achieve?

do you have suffficient deposit?
and/or
is your income sufficient for the mortgage you want?

DrRusty

Thankyou all for your quick responses.

I think that the responses so far seem to confirm my initial thoughts, when this was suggested by my parents.

Situation is that we are, not uncommonly, strugglling to find a sufficient deposit in or to achieve a fair interest rate. We are about £4k down on the intial and minimum 10% deposit.

I have no doubt that we can afford a mortgage, but it is getting the inital offer and at a rate that is not punative (i.e. 6% is exteme with interest rates at 0.5%).

n.b. parents retired with motgage free property, but won't actually remortgage, probably might even struggle due to thier age.

TrickyDicky

DrRusty wrote: »

I have no doubt that we can afford a mortgage, but it is getting the inital offer and at a rate that is not punative (i.e. 6% is exteme with interest rates at 0.5%).

There isnt much of a change until you reach a 25% deposit level.

DrRusty

TrickyDicky wrote: »

There isnt much of a change until you reach a 25% deposit level.

: ( I know, but if I had a 25% deposit I would expect a great deal, but that's around £40-50k based on the average house price at the moment !!!