Guarantor Mortgages Advice Please!

anniecwp

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holly_hobby

The purpose of a guarantor is effectively to say that they will maintain the mortgage repayments if you can't.

So, yes your Grandparents (if still happily with their full facilities) will be assessed for their ability to service the mortgage. So their age will certainly be the main hurdle (they may even at application stage be o/s of the lenders max age criteria), as will their level and source of income.

Should the lender even consider them past these 2 hurdles they will require confirmation that the guarantors are not classed as vunerable due to their ages, and have sought and received legal advice re their obligations as a guarantor and the legal agreement they are entering into - and I would suggest if you are going this route that the whole family are involved and aware of whats happening.

I have to say that (even if agreeable by the lender), I really wouldn't want that responsibility for my grandparents in their autumn years, even if they were happy to participate - but of course the choice is entirely a family matter.

I do hope this helps (if not a little negative )

Holly

somethingcorporate

I'd like to reinforce Holly's point about whether you would want to burden and stress your elderly grandparents with the responsibility of a mortgage on a house that they do not even own.

If you or your husband cannot pay you could financially burden or ruin them at a time when they should be enjoying the remainder of their days.

What does your husband do that means the income cannot be considered?

anniecwp

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holly_hobby

-Well you are obviously comfortable for their involvement, and feel that they are financially able to meet guarantor requirements and happy to accept the financial responsibilites any such arrangement will bring.

So that just leaves the issue of their age, which I feel may well post a problem with lenders who accept guarantors - in this case only the lender you are currently dealing with can tell you their own criteria on this.

One angle for this is to suggest a time frame for release of the guarantors i.e when you feel your husband will be earning sufficient income to become party to the mortgage. (notwithstanding the severity of his "less than perfect credit history".

This may help with max ages and terms .. the issue will be if they can't be released at the schedueld time ..

Speak to your broker or lender re the specifics ..

Holly

Thrugelmir

If you are unable to raise the mortgage that you require on your own income. Then having a guarantor is of no use.

The purpose of a guarantor is not to cover a shortfall.

You will need to declare your husband as living in the property. So the lender will connect you by financial association even if not on the mortgage.

anniecwp

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Thrugelmir

anniecwp wrote: »

What is the point in a guarantor mortgage then? In what circumstances would they be used?

Is there any way of avoiding the financial association with my husband (for now)? Does this mean I would be likely to have any application declined, even based solely on my own income?

Where the lender is advancing a 100% LTV where the applicants are borrowing on a high income multiple or a lower LTV where the applicants are considered to be a risk.

In both instances the applicants will meet the income level required to meet the lending criteria.

Your issue seems to be affordability on your income alone. Anything else is a secondary issue.