Can I do a guarantor mortgage if I'm on a stipend income?

bhayes90

Hi all, 
My partner and i are keen to get on the housing ladder, but the pandemic threw a spanner in the works. He's doing teacher training, which was delayed, so instead of being employed now, he's stuck as a student until at least Feb. 
I'm a PhD student on a stipend income, which is about £16,000 for the year (tax free).
Because of our current situation, I'm our only reliable and (for the sake of mortgage calculations) usable income. Although he is doing some tutoring and freelancing.
I'm aware that on a stipend, I need a 20% deposit, which isn't a problem. But I'm only able to borrow 4x my stipend, which equates to 64k and isn't enough to cover the purchase of a house. 

If my parents were guarantors, does that change the amount I'm allowed to borrow? Even if I'm on stipend income? 
We're first time buyers and still in the process of trying to understand the system, please help! 

Thanks all

kingstreet

You need to establish if your lender offers "joint borrower, sole proprietor" products. This is the new name for guarantor facilities.

bearclaws

Hi! I’m a PhD student buying alone and can attest that it’s not easy. Most high street lenders don’t consider a stipend as a real income so I was also considering joint borrower sole proprietor (JBSP) mortgages before I found the product I’m currently pursuing solo. I’d recommend using a broker familiar with JBSP mortgages. My broker talked to Principality, Barclays and Metro Bank, so there are options out there. 

Your parents will need to have a really clean credit history. And keep in mind that often the lenders won’t even take your income into account and will base it on your parents income only, which can be good or bad, so yes you will be able to borrow more if your parents are on a higher wage. Also bear in mind your parents age — what ruined this option for me is that my mum is 62 and the lenders would only do the term until the oldest person is 80 so I was looking at an 18 year term which shot the payments right up! Lastly, if your parents already have a mortgage, then taking a second mortgage can run them into all sorts of problems with capital gains tax, so consider it carefully. 

My plan was to remortgage once I’m in full time work but I decided to go for a solo application somewhere else because I only need a small mortgage. Again, a broker will be able to help you with this! If you can find the right product and it works for everyone then it is a good option.  

Good luck!