Guarentor Mortgages FTB

Hawthorn88

Hi,

I am looking to hopefully apply for a mortgage within the next few months. However it will be a single application and the amount i can therefore borrow will be limited.

Having researched mortgage repayment rates and average monthly bills i am confident that i can afford the cost of a house comfortably.

I have also got a lodger lined up to create some extra income.

Could anyone please explain to me how Guarentor Mortgages work and whether i would be able to increase the amount i could borrow?

Would this be better than simply applying for a joint mortgage with my Dad, with me simply covering the repayments myself?

I currently earn £20k per annum.
I have a 10% deposit on a £100k property.

Any advice would be appreciated before i make appointments at the bank

holly_hobby

Most lenders whom operate a guarantor facility, will look for a defined time period within which your guarantor will be able to be released, and you take on the full legal responsiblity for maintaining the mge.

A good example where a guarantor mge is utilised is where you have a newly qualified professional, where their salary is lower in the immediate yrs following qualification.

A guarantor's responsibility is a serious one - they will be assessed themselves for affordability re the mortgage, and are legally responsible for servicing the account if you fail to maintain payments. The lender will also want evidence/confirmation that the "would be" guarantor has taken independent legal advice, as to the ramifications of standing as additional suriety for the lender.

A guarantor is not simply for those individuals whose normal/standard salary doesn't support their preferred borrowings.

If Dad goes onto the mge, again his income and age will be assessed as part of the application, and may restrict the term (notwithstanding any exposure to CGT on disposal of the property whilst he remains a mortgagor).

Best advice ....I would try and keep parents out of the mix, and instead save hard to obtain a larger deposit taking the pressure off your salary multiple.

Hope this helps

Holly