Guarantor mortgages

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ViolaLass
ViolaLass Posts: 5,764 Forumite
in Mortgages & endowments
I've tried googling about guarantor mortgages but I haven't found the answer to my question. Please help me settle an argument.

A couple have a joint income of £31-33k. They have been gifted a £20k deposit and want to get a mortgage for £180k. They think that getting one set of parents to stand as guarantors will allow them to do this.

Assume that the parents could afford to guarantee the loan.

Can it be done? Or do the usual income multiples apply?

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  • obay
    obay Posts: 570 Forumite
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    ViolaLass wrote: »
    I've tried googling about guarantor mortgages but I haven't found the answer to my question. Please help me settle an argument.

    A couple have a joint income of £31-33k. They have been gifted a £20k deposit and want to get a mortgage for £180k. They think that getting one set of parents to stand as guarantors will allow them to do this.

    Assume that the parents could afford to guarantee the loan.

    Can it be done? Or do the usual income multiples apply?

    I'd go straight to a broker, and get your own application without a guarantor..

    You have around a 10% deposit... you are able to do this on your own.
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  • ViolaLass
    ViolaLass Posts: 5,764 Forumite
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    obay wrote: »
    I'd go straight to a broker, and get your own application without a guarantor..

    You have around a 10% deposit... you are able to do this on your own.

    It's not me.

    Isn't 5.5 too high an income multiple?
  • YHM
    YHM Posts: 650 Forumite
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    Guarantor mortgages are effectively a historic term as the majority of lenders would not just take a guarantee on the mortgage being repaid.

    There are different ways about it nowadays, with lenders allowing for 3 way applications etc that provide the same outcome. There are also a couple of lenders that have different products that use 'sponsor' income to support an application.

    You need to speak to a good broker, that can support you with this
    I am a Mortgage Broker.

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice
  • kingstreet
    kingstreet Posts: 38,770 Forumite
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    ViolaLass wrote: »
    I've tried googling about guarantor mortgages but I haven't found the answer to my question. Please help me settle an argument.

    A couple have a joint income of £31-33k. They have been gifted a £20k deposit and want to get a mortgage for £180k. They think that getting one set of parents to stand as guarantors will allow them to do this.

    Assume that the parents could afford to guarantee the loan.

    Can it be done? Or do the usual income multiples apply?
    You are describing the precise reason for a guarantor mortgage. The purchaser can't borrow enough alone, so (eg) a parent joins them on the mortgage application to boost the borrowing power.

    Now we have the SDLT surcharge on second properties, such products are returning to popularity using the acronym 'JBSP' or the more long-winded 'joint borrower, sole proprietor' label. This simply means there will be more borrowers than owners.

    A good independent broker will be able to establish options and narrow down to the best lender from the circumstances presented.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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