Parent Guarantor for mortgage

mistrihelen

Sounds like your child is saying you 'only' need to be a guarantor, like it's a small favour, whereas in reality whether you are a guarantor or co-owner, the responsibilities are large, there is also risk if they don't pay. Unless you want to buy a BTL I wouldn't go near this with a barge-pole. And why do they want a BTL? Better to wait until they can afford to buy their own home and buy that instead.

Mick70

As I was being asked by the FA to be named jointly in the deeds and didn’t fancy being lumbered with problems caused by a bad tenant I said no .
thanks for advice 
mIck

steampowered

Mick70 said:

I am the parent 

Then it is even worse. All of the disadvantages mentioned in my post still apply.

Plus, your child will lose all of their first time buyer benefits. 

Plus, you are potentially leaving your child in a position where they cannot afford a property of their own (since they will no longer qualify for first time buyer stamp duty relief; instead they will have to pay a 3% surcharge - that's an extra £9,000 on a £300k property) - without their consent !!!!!

I know you mean well but it's a really bad idea. If you want to do this you will be much better off buying the house in your own name, and gifting your child the money.  

dimbo61

While I agree with all the other posters about this being a terrible idea which I don't think will get off the ground as your mortgage adviser will struggle to get a BTL mortgage for a first time buyer who will assume your son intends to live in the property with an Interest only mortgage.
He could buy a property which he lives in with Lodger/s 
He could then use all the ftb help such as HTB ISA £2,400 each year and LISA ISA £4,000 each year plus ftb deals from lenders.
If the bank of Mum and dad can help with the deposit so he builds up funds quicker all the better !

[Deleted User]

Joint Borrower Sole Owner mortgages can be done for BTL.  They are only really done when we need an income to qualify for the mortgage but the property is going in a child's name.  
Lenders who do this type of mortgage also allow FTB to do BTL

Its not uncommon 

Thrugelmir

Mick70 said:

As I was being asked by the FA to be named jointly in the deeds and didn’t fancy being lumbered with problems caused by a bad tenant I said no .
thanks for advice 
mIck

Are we only getting part of the full story? 

ayupmeduck

I do wonder how old the 'child' is. Is it common to take your parents to a mortgage appointment?

AdrianC

ayupmeduck said:

I do wonder how old the 'child' is.

If they are a child, it would be illegal for them to enter into a credit agreement - so they must be an adult...