Mortgage with No income but with Guarantor

davidjones90

Hi Guys,
Just curious is it at all possible to get a mortgage with a 20% deposit with a UK based Guarantor (parents) who will be able to guarantee that mortgage payments will be made?

marlasinger

I'd say it would be doubtful, and anyone who would agree to be guarantor would be mad, IMO.

davidjones90

Just to add the value of the property is only twice the annual income of the guarantor. You think its worthwhile speaking to a mortgage advisor?

holly_hobby

Have a look at Marsden BS site and Tipton and Cosely (if property in the midlands) - both 100% max family assisted schemes.

Tipton look at having a charge secured against the family members property, which may be released when LTV falls below 75% and the mortgagor is able to service the mge on their own.

Links for ref: -
http://www.themarsden.co.uk/
http://www.thetipton.co.uk/home/mortgages/parental-assisted-discount

However, generally the applicant does have to be able to support the borrowings to some degree - as if no income how will they be paying the reqd monthly mge repayments !!

Additionally the guarantors income has to be sufficient to service all their own commitments and that of the proposed mortgage.

This sounds like a dead duck - but I've given some links to sound it out with lenders who have family assisted borrowing schemes.
Hope this helps

Holly

davidjones90

Im just thinking about it, I do have a property mortgage free and in my name ~ 200k. Would that make any difference ?

holly_hobby

Not if you don't have any income.

Only way round it would be Buy To Let app (affordability based on rental income 125% of mge payments), but you do generally need your own earned income, some lenders have a min inc of 25k some have no min income - but you still need to be earning. Further complicated by the fact that your current property is unencumbered (and if you are a first time landlord).

Other than that, the guarantor going on the mge app with you as a joint applicant ? (although this will raise CGT issues for them )


H

davidjones90

I really really appreciate your help and time for helping me out. When it comes to finance issue with regards to mortgages.

The property I have produce £700 per month, but I am unsure if this is actually considered as an income.

The mortgage I am seeking would be a buy to let.

Regards,

holly_hobby

Right so you do actually want a buy to let (BTL) mortgage, this should have been disclosed in your initial post, so that replies could be specific and correct.

Having said that, there are not guarantor BTL schemes (at least that I am aware of).

Are you a professional landlord ? i.e is this your sole source of income ? Do you have accounts or HMRC tax submissions that may presented to the lender ?

If you have no evidence of taxable income i.e you are not declaring or paying income tax on the rent you currently receive - you've no chance of a mortgage (and every chance of being prosecuted by HMRC for tax evasion).

Assuming a professional/portfolio landlord in relation to the income situation - 80% BTL schemes available via The Mortgage Works & Kensington Mortgages (intermediary access only).

You will need to sound this out with them directly .....

Holly