Can students get mortgage with a guarantor?

lynsey2020

I have three questions to ask

1. My partner and I are students and we would like to mortgage a house. I know this used to be possible but not sure anymore. My father is willing to be guarantor, provide the deposit and pay monthly mortgage. Does anyone know could we get a mortgage in our name?

2. Second option, my father takes out the mortgage in his name and we live in it. However, is it true that he will need to take out an investment mortage and have 25-30 % of the value of the house?

3. If such a large deposit is needed we have thought about going to the auction to buy. If a mortgage provider gives us a mortgage promise, is this absolutely guaranteed? Say we buy the property at the auction (I think they require 10 % deposit) we don't get that money back if the mortgage promise falls through. True or False?

Thanks in advance for any advice!

Thrugelmir

lynsey2020 wrote: »

I have three questions to ask

1. My partner and I are students and we would like to mortgage a house. I know this used to be possible but not sure anymore. My father is willing to be guarantor, provide the deposit and pay monthly mortgage. Does anyone know could we get a mortgage in our name?

2. Second option, my father takes out the mortgage in his name and we live in it. However, is it true that he will need to take out an investment mortage and have 25-30 % of the value of the house?

3. If such a large deposit is needed we have thought about going to the auction to buy. If a mortgage provider gives us a mortgage promise, is this absolutely guaranteed? Say we buy the property at the auction (I think they require 10 % deposit) we don't get that money back if the mortgage promise falls through. True or False?

Thanks in advance for any advice!

1. You'll need to prove your ability to afford the mortgage.

2. At least a 25% deposit. The interest cost would be higher than a residential mortgage and could incur sizable product fees as well.

3. No such thing as a mortgage promise. At an auction you'll need to pay 10% on winning the lot. If you fail to complete then you forfeit your deposit.

holly_hobby

Yes entirely possible, there is a specific scheme which is designed for those in higher education, seeking to purchase a property in either their own name (parents guarantor) or with parents as party (so no need at this point to consider option 2, which would be better purchased as just a 2nd property, rather than investment - as this will have mortgage regulatory issues if purchased with a BTL mortgage).

Anyway back to how you may go about this - the scheme is called "Uni Mortgage" and is marketed by Bath Building Society - here is the direct link to the lender and scheme details - http://www.buyforuni.co.uk/buyforuni-mortgage.html. After assessing that you fit their criteria, give them a call to discuss your requirements etc, and take it from there.

Do consider though that parents as guarantor is a very big ask (and risk to them). They as guarantor (or indeed party to the mge), are legally responsible should the mortgage repayments not be met - and a time in their life when they really shouldn't have such worries .

Anyhoo, I'm sure you have already considered this...

Hope this helps and good luck !

Holly

lynsey2020

Thank you for your reply. I will look in to it and let you know the outcome!