Mortgage Help - Parents as Guarantors

simp2011

Hi all,
Have a query about the above and this seems the best place to go for advice!!

Basically im a first time Buyer, on 30k a year and looking into getting a mortgage (live in Scotland)!! I have 20k deposit too!!

I have a bit of bad credit history, my Experian Score was 700 and something (can't rememeber it exactly) and from reading around id prob be refused a mortgage myself due to this. I have no debts now, all bad credit was from a year or more so ago and all paid off!!

Spoke to my parents and they are more than happy to be my Guarantors as they know i can easily make the monthly payments and they spoke to their bank manager who said with them as my Guarantors id easily manage to get a mortgage.

Could anyone shed some light on this if possible as i know my credit still needs to be checked along with theirs!! Can they still blatently refuse a mortgage because of my credit history?!?!

Thanks!!

Thrugelmir

simp2011 wrote: »

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Could anyone shed some light on this if possible as i know my credit still needs to be checked along with theirs!! Can they still blatently refuse a mortgage because of my credit history?!?!

Not all mortgage lenders accept guarantors. One of the boards resident mortgage brokers should be able to point in the direction of those that do.

There's more to being a guarantor than merely a credit check. As the guarantor will need to be able to demonstrate that they can afford the monthly repayments in the event of you defaulting and going into arrears.

You have no automatic right to a mortgage. So "refuse" isn't I how would describe the position you find yourself in. Your credit report is a reflection of how you have managed your personal finances. Lenders only have limited funds so will of course lend as they think fit.

Conrad

It is unlikely a guarantor for you will be accepted. Usualy guarantor mortgages are there for high quality cases such as a lawyer in training where it is likely thier income will increase sufficietly in the near future.

The only way is probably just your parents buying a second property that you all know is really yours. You need to take care - not all lenders will aloow you, a relative to occupy.

TMW is a lender I would consider for such clients so you THEY may want to check thier rates but beware, one thing said in error will kill the deal.

simp2011

Ah yes sorry, forgot to mention about my wage!

Only been in Job 3 months but have an Increase every 6 months over over £1k going to £3k after 2 years built into my contract which i can show as proof of this!

catieeb06

Most lenders class a guarantor as someone there to take over the mortgage payments should you fail to do so for whatever reason, they won't accept them just to bolster your credit score and aid you taking out a mortgage.

When you say bad credit, could you disclose a little more around that?

And how much are you borrowing etc?...

Thanks,

Catie

simp2011

Bad credit is from missing payments when i was away travelling on my credit card as didn't have Direct Debit set up & sometimes wasn't near a computer for a while!! All paid off fully now though!!

Looking at borrowing about 120-130k ish...!!

lindsaygalaxy

We too are looking at getting a guarantor mortgage as I have bad credit (discharged BR) but my partner has good credit, but doesn't earn enough to get a mortgage on his own for the value of properties in the area (be looking at around £170k). Together we can afford it as would infact be less than what we pay in rent, but need his parents to in a way 'top up' his income. We too are hoping someone will accept us, at a reasonable fixed rate!

catieeb06

simp2011 wrote: »

Bad credit is from missing payments when i was away travelling on my credit card as didn't have Direct Debit set up & sometimes wasn't near a computer for a while!! All paid off fully now though!!

Looking at borrowing about 120-130k ish...!!

How many missed payments and when?