Guarantor Mortgage

kevinwebster83

Hi,

I'm looking for some advice.

Does anyone know if it would be possible to get a guarantor mortgage backed by my parents who are approaching retirement age but own their house outright?

I currently own two properties - one is about £30,000 in equity and the other is about break even - the latter being a rental property which has been rented constantly for 3 years.

My parents property is worth roughly £200,000 and I would wish to obtain a mortgage of £40,000 - £50,000.

Thanks in advance
K

Thrugelmir

Unless your parents have a high level of guaranteed income then the answer will be no.

Why do want to add a third mortgaged property to your portfolio when you are already overexposed it would seem.

kevinwebster83

Would the house not be used as guaranteed income? They have good pensions but ultimately I would be the one paying the mortgage. I plan on selling the equitable house in a couple of years time - the equity from which would be used to repay the mortgage taken out on my parents house. I'm not overexposed as such as I have a very good income.

I'm in a position where I need to raise the amount in question. Other than releasing equity from my parents house, I don't see any other way of doing this. Any ideas?

Thrugelmir

Your parents need the income to cover the mortgage payments in the event of default. Its not just a question of securing the debt with another asset.

An underwriter would have severe reservations I suspect if your parents were put forward as guarantors for the debt.

kevinwebster83

Thanks for your reply.

Is there any other avenues I could investigate to help me raise the amount required?

Thanks

herbiesjp

Do you live in either of the first two properties?

Is the one you are looking to but a BTL?

kevinwebster83

I live in the main property (the one in equity). The second property is rented out.

I'm not looking to purchase another property but to acquire an amount for a deposit for my ex and my son to allow them to purchase a property. I want to continue living in my main property but this will be sold in a year or so time - market depending.

Thrugelmir

kevinwebster83 wrote: »

Is there any other avenues I could investigate to help me raise the amount required?

Reinvest the profit from the let property. Initially by paying your residential mortgage down. Property investment is capital intensive. Without capital gain, them income reinvestment to reduce indebtedness is the only way forward.

kevinwebster83

Ok, thanks for your help

kingstreet

This isn't a guarantor case. You need your parents to remortgage their unencumbered property to raise capital for you.

As Thrugelmir has said, I expect this will be a non-starter for both income and age (remaining term too short for affordability) reasons.

Conrad

Your parents do have options to obtain a mortgage over thier own property even if all thier income is pension based. Some lenders allow a term over the age of 75, especially some small Building Societies.