guarantor mortgage

silver_1_2

My son and his girlfriend want to buy house, they are first time buyers. They want us to sign as guarantors for their mortgage, As they dont have enough income on paper . Not sure if it will affect us. Anyone any experience of this type of mortgage???

maninthestreet

Being a guarantor for a mortage means you are agreeing to make the mortage payments if the mortgagees (your son and girlfriend) can't, or won't make the payments - are you happy to do so?

silvercar

you will also need to have sufficient income, after your own outgoings to be able to afford their mortgage, or at least to top up their payments based on affordability.

jennifernil

We have done this for both our children. The house will be in their names but the mortgage will be granted on your income , minus any mortgage you have. By signing up for this you will be responsible for paying the mortgage if they default, so think it over very carefully.
Only do it if you are sure that they can afford the repayments, and if you can afford it if anything goes wrong. Consider too what could happen if they split up. You should take legal advice.

shameless-about-money

If your son and girlfriend split up, fall out, fail to make the repayments, the lender can make YOU bankrupt if you don't pay the mortgage for them.

This is very dodgy ground unless you have thousands of pounds going spare in the bank.

Not to be recommended at all. If it were a normal loan for a small amount that might not be so bad, but not a mortgage. In fact, if you speak to a solicitor about it they would steer you well away.

If the couple don't have enough income on paper they can't afford to buy the house so they'll just have to rent - to prove that they could afford a mortgage somewhere down the line.

ell08

I'm thinking about this too - I'm a student at the moment and me and my boyfriend want to buy a house when we graduate next year. We have enough savings for a deposit, but due to being full time students, no regular income just odd short term jobs here and there.
Will any lenders even look at us if we have not been in stable jobs for 6 months/however long they want prior to the mortgage? Hopefully we will have jobs when we finish uni (!) so repayments will not be a problem but if we havent been working for enough time will lenders accept our parents as guarantors instead? Or will we have to keep renting while working for a while... Any advice would be much appreciated!

shameless-about-money

ell08 wrote:

I'm thinking about this too - I'm a student at the moment and me and my boyfriend want to buy a house when we graduate next year. We have enough savings for a deposit, but due to being full time students, no regular income just odd short term jobs here and there.
Will any lenders even look at us if we have not been in stable jobs for 6 months/however long they want prior to the mortgage? Hopefully we will have jobs when we finish uni (!) so repayments will not be a problem but if we havent been working for enough time will lenders accept our parents as guarantors instead? Or will we have to keep renting while working for a while... Any advice would be much appreciated!

You would need to pay rent of proportionate value, or pay the same money into a savings account every month religiously, to prove that you could manage a mortgage.

No solicitor with any sense would allow your parents to stand as guarantors.

jennifernil

While your parents need to be aware of what they are signing up to, and take legal advice, it is their decision.

We stood as guarantors for our son on his first house after he graduated as, although he had a job that paid enough to get the mortgage, he was in the same position as you would be in, no employment history. However he was buying alone, if there had been a partner involved then we would have needed her parents to be guarantors too.

Our daughter is a student at present so we were guarantors for her mortgage. Again, she is sole owner, so there are no complications. And we were paying the mortgage anyway, rather than rent!

We do have a signed agreement in place that she has to repay the money we have put in when the flat is sold, the rest she gets to keep.

Have you discussed this with your parents?