Guarantor Mortgages??

katiemayfinch

Hello,

Myself and my husband currently own a 2 bedroom flat & looking to buy a 3 bedroom house. Our mortgage was initially given to us on joint incomes, but since then I have given up work to raise our children.

We had £35k deposit from my parents & borrowed £125k to buy the flat for £160k.

Since then, the flat value has risen to £220k so essentially we have £100k after the sale as a deposit on a new house from the rise in value & our original deposit amount.

Because I gave up work, and my husband is self employed with not high enough profit, there isn't a mortgage lender in the country that would lend us the £180k we need to buy the house. I think the most we can borrow is £120k currently, 60k shortfall.

However, my parents own two properties outright, have big pensions (both retired early and not currently at retirement age) and money invested etc.

Basically, without them having to gift us another £60-80k is there a way they can just guarantor our mortgage payments?

We both have good credit history, savings, no debt & overpay our mortgage every month by almost the amount our new mortgage will be.

Ideally Id like to go to Halifax and for them to see we will be actually better off financially moving out of the flat and into a house, saving on huge maintenance charges etc. but I assume it will be a computer says no scenario straight away.

I rang L&C mortgage brokers earlier and the guy on the phone said guarantor mortgages don't exist, but reading stuff on here contradicts that...

Any help would be greatly appreciated

csgohan4

http://www.which.co.uk/money/mortgages-and-property/mortgages/guides/types-of-mortgage/guarantor-mortgages


they exist but if I was your parent, I wouldn't touch it with a barge pole. Money and family shouldn't mix.


You should consult a better broker that specialises in the self employed, L+C are vanilla conveyor belt brokers, what do you expect when they are free.


How much does your husband pay himself??


How much is left on mortgage??

kingstreet

There are lenders who offer joint borrower, sole proprietor mortgages which is the basis of a guarantor product.

There is no way of knowing if your situation will be acceptable, but as the guarantor has to be able to guarantee the whole payment for the whole term, they normally fall down when it comes to parents who have already retired and the possible term.

Early retirement at 55 and a 25 year mortgage term so you can afford the payments is an expiry age of 80 which may not be possible. As a result, you might end up having to use an unaffordable term to avoid this.

Such cases need careful construction by experienced brokers and this is a "bespoke" job for which you will probably have to pay a fee.

amnblog

Not sure where the L & C 'adviser' is getting his industry knowledge from.


Some Lenders have pulled away from Guarantor mortgages including some big names, but they are still available in a number of places on the market.


As Kingstreet says - this is not a job for an inexperienced broker - numerous potential difficulties.