Guarantor against £60,000. Is it possible??

princessdaisy_2

Me & my partner would like to purchase a property for £280,000. However we can only borrow 4.8 times our income with The Abbey which would allow us to borrow only £220,000. I have heard that it might be possible to get the extra £60,000 onto our mortgage if my Dad is able to act as guarantor for the £60,000 against his property? Does any one know of this?

_Andy_

You will need at least a 10% deposit so that plan wouldn't work (i.e. you'll need at least £28k cash to put down)

Senior_Paper_Monitor

There are two schemes - and there are other ways to structure such an arrangement - that leap to mind (one could accept 5% of total as deposit, one could accept 10% of your share).

Neither go to 4.8 times income on your share (from memory).

A number of other factors come into play as well.

You refer to 'a partner' - be aware (as should your parents) of the ownsership implications in such arrangements under a minefield of the need for protection in a variety of possible future circumstances.

You all appear to be willing to 'push the financial envelope' - are you sure this wise ?

I recomend that any progress is under the advice of a mortage broker of IFA familiar with these areas, based on the previous 2 paragraphs!

princessdaisy_2

Thank you for your replies. We would be able to put down a 5% or 10% at a push deposit.

Do you know who these deals are with?

TrickyDicky

Your best options in my eyes:
Save more of a deposit, or get a gift from someone.
Buy a smaller property or buy in a different area.

There will be many more options open to you if you did either of these 2.

Conrad

Your Dad may raise a remortgage and then give you £60k, but a guarantor wont likely work in your situation. A guarantor mortgage is where the guarantor 'guarantees' the whole mortgage, not only £60k of it. Lenders will only do guarantors where there is a clear path demonstrated showing how the main applicants will soon be able to afford the entire mortgage on thier own using standard income multiples - for example wealthy Mum guarantoring sons mortgage where son is a trainee Doctor but likely to be earning double in 2 years time.

My advice - do it all in your name but find a cheaper property that does fit your income mutiples. 95% is very unlikely to be agreed unless you are perfect applicants borrowing a low multiple such as 2.75X joint income.

Fairdo_2

Not much time to read too thoroughly as in a rush to get back to the day job, but only limited liability guarantor scheme I know of is through TMW (The Mortgage Works) which is part of Nationwide Building Society, but it does have Loan To Value restraints and on the glance at your situation, I think you wouldn't qualify for it. My comments on this are for the benefit of the general enquiry, but probably worth getting a Mortgage Broker to have a proper look. Agree with the above though, be careful not to stretch yourself too far. Benefit from other peoples hindsight and keep it affordable for you.

princessdaisy_2

Thanks all for your advice. We have decide after much talking to look for a cheaper house. It was just that the house next door to my Mum and Dad has come up for sale and would have been nice to be next door to my Mum who is sick. Never mind though.

luckyfool

You can get Guarantor deals from the likes of TMW which go to 85%, where your parents are only on the hook for the excess that they would not lend to you in your own sole names. Normal guarantor mortgages mean they need to guarantee the whole mortgage.