Guarantor mortgages

ag359

Struggling to find an answer to a simple question online, so perhaps one of the many mortgage advisors on here might be able to help.

How much could I expect to be able to borrow on a mortgage if it were to be guaranteed by my parents. My partner and I have an approximate gross income of £62k, my parents' joint income is in the region of £75k. We would be able to put down a deposit of 5%, so would be looking for a 95% mortgage. For the time being at least, please ignore the issue of whether we can afford the repayments (although obviously I'll factor that in eventually) - at the moment I'm just looking to find out what we would be able to borrow.

Thanks in advance for any help.

Mrs_pbradley936

When we helped our youngest son to buy we put the mortgage on our house (by then mortgage free) and had a trust deed (or is it deed of trust) drawn up by the solicitor. It worked out beeter in our circumstances because of the loan to value ratio. Basically our son wanted to borrow £90K to put that on his flat would have been about 95% so a higher rate but to put it on our house (over £500K) would have been just less than 20% so we got a much better rate. Now we are our son's lender.

herbiesjp

What kind of property prices would you be looking at?

I think working it backwards might make it easier to see if it is do-able

JoeK_3

ag359 wrote: »

Struggling to find an answer to a simple question online, so perhaps one of the many mortgage advisors on here might be able to help.

How much could I expect to be able to borrow on a mortgage if it were to be guaranteed by my parents. My partner and I have an approximate gross income of £62k, my parents' joint income is in the region of £75k. We would be able to put down a deposit of 5%, so would be looking for a 95% mortgage. For the time being at least, please ignore the issue of whether we can afford the repayments (although obviously I'll factor that in eventually) - at the moment I'm just looking to find out what we would be able to borrow.

Thanks in advance for any help.

How much are you looking to borrow as your joint incomes will allow you to borrow around £200,000 plus the guarantors income around the same, making £400,000, subject to certain questions being answered.

Are the guarantors income free of mortgages and loans?

JoeK

ag359

We'd be looking at something around the £350k mark hopefully.

Parents do still have a mortgage on their current house - I don't know the details but I would imagine it isn't huge (I think the house only cost them 130k, and that was ten years ago, and they haven't remortgaged at any point).

herbiesjp

Based on that, there may be a handful of lenders that could agree the mortgage on your joint incomes alone

That is, provided you meet all the other criteria

JoeK_3

ag359 wrote: »

We'd be looking at something around the £350k mark hopefully.

Parents do still have a mortgage on their current house - I don't know the details but I would imagine it isn't huge (I think the house only cost them 130k, and that was ten years ago, and they haven't remortgaged at any point).

The existing mortgage would affect the guarantee but looking at the figures it looks easy.

JoeK

herbiesjp

Just another thought

In order to avoid potential IHT and CGT complications if you go down the guarantor route, could your parents raise some equiy from their property, in order for you to put down as a larger deposit? Again this way making it easier to buy just in your own names?

ag359

herbiesjp wrote: »

Based on that, there may be a handful of lenders that could agree the mortgage on your joint incomes alone

That is, provided you meet all the other criteria

Even with a 95% mortgage? That's interesting...my mortgage advisor didn't seem to think this would be possible. Any clues as to which lenders I should be looking at

ag359

JoeK wrote: »

The existing mortgage would affect the guarantee but looking at the figures it looks easy.

JoeK

JoeK

Thanks for that. You say it would be easy - does that mean we'd even have a chance of stretching to 400k?

JoeK_3

ag359 wrote: »

JoeK

Thanks for that. You say it would be easy - does that mean we'd even have a chance of stretching to 400k?

I could only answer that if I knew what mortgage your parents had.

Can you find out?

I would however be concerned about affordability.

JoeK