Mortgage Guarantor Myth?

uberteeb

My mother has a house worth £200k, she owns this outright with no mortgage. She seems to think that she can 'guarantee' £10k somehow towards a mortgage for me.

In theory what would happen is I save my £10k cash, she somehow 'gives'/'guarantees' another £10k and I then borrow an £80k mortgage. So I essentially have a 20% deposit on a £100k flat (by virtue of my £10k and mother's 10k).

Now is any of this even possible? She does not have £10k cash to hand to me, she does not intend to be re-mortgaging/taking out a loan against the house but she still seems adament that somehow this is possible, can anyone help?

beecher2

She would need to physically give you £10k in order for you to have a 20% deposit. The money would need to be paid towards an actual deposit, not guaranteed.

Comyface

Hi uberteeb

I can't think of any way this would be possible, short of her taking out a loan secured against her property tbh.

As far as I know a mortgage can only be secured against one property (so, the one you're buying). There's no way to put a charge on another property (your mum's) for the same debt.

Sorry.

uberteeb

Thats what I thought, "mothers know everything" my **** :rotfl:

So am I right in thinking that with no savings from which to muster £10k she will have to secure a loan on the property and then hand me £10k in cash (which unfortunately she is unable and/or unwilling to do which I understand completely)?

Oh well, looks I'll have to resume my flat searches in the £90k bracket and not 100 :mad:

uberteeb

Apologies for the 'bump' but can anyone else shed any light?

beecher2

Not sure what you still need to know. Without £20k in your bank account, you can't get a 80% LTV mortgage on a £100k house.

Thrugelmir

uberteeb wrote: »

Apologies for the 'bump' but can anyone else shed any light?

Save some more. If you afford a £180k mortgage then saving £10k shouldn't take long.

geoffky

uberteeb wrote: »

Thats what I thought, "mothers know everything" my **** :rotfl:

So am I right in thinking that with no savings from which to muster £10k she will have to secure a loan on the property and then hand me £10k in cash (which unfortunately she is unable and/or unwilling to do which I understand completely)?

Oh well, looks I'll have to resume my flat searches in the £90k bracket and not 100 :mad:

i would be looking at 130k flats and offering 90k why aren't you?