How to get a mortgage for daughter

DianeM
DianeM Posts: 152 Forumite
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in Mortgages & endowments
Glad for any info...
Hi all,
Daughter is wanting to buy a house but is 3 months off graduating.

She has £20K saved but will not be able to provide payslips therefore myself and her dad are willing to take out a mortgage for her in the interim period (we have been mortgage free for 5 years) but of course are 51 and 53.

Does anyone have any experience of guarantor mortgages?

The plan would be to take out the mortgage then once she starts working she can take it over but I'm wondering about having to pay legal fees to change it to her name of if she can have it in her name or joint and once she has been 'vetted' the house and mortgage can be changed (again more fees) and we also don't necessarily want to be tied for 2 years.

I really don't know where to start so I am after any information anyone can share.

Comments

  • juniordoc
    juniordoc Posts: 366 Forumite
    Is she working at all now? What is her plan for a job when she graduates? The process of finding a house to buy and purchasing it usually takes 2-3 months, it does sound like it'd be a lot easier to just wait.
  • YHM
    YHM Posts: 650 Forumite
    Guarantor Mortgages in practice don't exist anymore.

    Yes there will be legal fees down the line to either sell her the property or transfer the equity into her sole name, dependant on how you structure the initial ownership of the property.

    I would obviously advocate the services of a solid mortgage broker that can guide you, as this could get tricky.
    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
  • silvercar
    silvercar Posts: 46,945 Ambassador
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    If you buy it in your name you will clobbered for extra stamp duty and potential CGT in the future.

    You need to find a mortgage where she owns the property and you guarantee the mortgage.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • kingstreet
    kingstreet Posts: 38,750 Forumite
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    YHM wrote: »
    Guarantor Mortgages in practice don't exist anymore
    Joint borrower, sole proprietor is what we used to call a guarantor mortgage twenty-five years ago.
    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.
  • kingstreet
    kingstreet Posts: 38,750 Forumite
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    DianeM wrote: »
    Glad for any info...
    Hi all,
    Daughter is wanting to buy a house but is 3 months off graduating.

    She has £20K saved but will not be able to provide payslips therefore myself and her dad are willing to take out a mortgage for her in the interim period (we have been mortgage free for 5 years) but of course are 51 and 53.

    Does anyone have any experience of guarantor mortgages?

    The plan would be to take out the mortgage then once she starts working she can take it over but I'm wondering about having to pay legal fees to change it to her name of if she can have it in her name or joint and once she has been 'vetted' the house and mortgage can be changed (again more fees) and we also don't necessarily want to be tied for 2 years.

    I really don't know where to start so I am after any information anyone can share.
    She can purchase the property in her sole name with a mortgage joint with you; what's known as 'joint borrower, sole proprietor'.

    This also helps her avoid stamp duty as you would be liable to the second property surcharge if either of you were named as owners with her.

    A broker will be able to assist you with the four or five options currently available.
    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.
  • silvercar
    silvercar Posts: 46,945 Ambassador
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    kingstreet wrote: »
    Joint borrower, sole proprietor is what we used to call a guarantor mortgage twenty-five years ago.

    According to an article in The Times today, they still are called JBSP. The article reckons that there will be more available in the future, but there are only a few at the moment. It says Metro Bank, Family BS & Hinkley & Rugby BS; though do your own research.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • kingstreet
    kingstreet Posts: 38,750 Forumite
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    There are more lenders than that now and 'JBSP' is the new name. I made it sound the other way round, sorry. :o

    In the good old days, a guarantor mortgage was just the same, more borrowers than there were owners, or JBSP for short.

    Same as...
    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.
  • dimbo61
    dimbo61 Posts: 13,716 Forumite
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    Why not look at YBS offset mortgages for your daughter.
    She will need to be working but you can help by having savings accounts offsetting her mortgage
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    DianeM wrote: »
    Daughter is wanting to buy a house but is 3 months off graduating.

    Isn't it wise to find a job before deciding where to buy a house?
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