A Guarantor Mortgage allows a third party (maybe your parents) to underwrite your mortgage repayments and obligations. But why would you want that?
Well, if you need a mortgage and you can’t get one this is worth considering. Perhaps your lender is concerned about whether you can afford the mortgage or they have concerns about your employment history? If so, one option is to offer them a guarantor who will guarantee to take on your mortgage obligations if you default.
This type of mortgage can be useful when a parent wants to help a son or daughter get onto the property ladder. However, there are risks associated with this type of mortgage as the guarantor is liable for any defaults. Their own home might even be at risk if they fail to cover their commitments.
As an alternative to a Guarantor Mortgage, it might be worth Mum and Dad participating in the purchase by buying part of the property and taking on part of the equity. On this basis it would be reasonable that they receive rent on the proportion of the property they own. Of course, shared equity purchase isn’t new but the big advantage is that, as a joint owner, your co-owner might introduce a larger deposit meaning that your mortgage is available on better terms. Also, as with a Guarantor Mortgage, your co-owners can also responsible for the mortgage repayments but with shared ownership at least they own part of the property!
In any event, what is becoming clear is that with ever-rising property prices the lenders and the UK Government are keen to introduce new ways for people to get on the property market. The Guarantor Mortgage is one such instrument.
Anyone considering a mortgage should contact an Independent Mortgage Adviser. Contact Mortgage Required on 01628 507477.
Related articles:
Download our Free First Time Buyers Guide
Recent posts
The Financial Conduct Authority (FCA) has published a discussion paper about the future of the mortgage market in a bid to improve access for first -time buyers, self-employed, and those borrowing in retirement.
Ever wondered where the most reasonably-priced towns for families to buy are? Property company, Zoopla has identified the top 10 towns for families to live in the UK by looking at the most affordable towns, and how many people are looking in that area.
Increase in zero-deposit mortgages in 2024
16 days ago
There was a 32% increase last year in 100% loan-to-value (LTV) mortgages which are mortgages that require zero deposit. According to a recent report by chartered accountants and business advisers, Lubbock Fine, the reason behind this is buyers simply struggling to save enough for a deposit.
Average savings by age in the UK
17 days ago
Many people are quite private when it comes to what is in their bank account. In this short blog, we look into what Brits have saved by age group.
Research from buy-to-let lender, Landbay, shows that UK landlords are looking at raising rents ahead of the Renters' Rights Bill which is due to come into force this year.
Data shows landlords could miss out on green mortgages due to expired energy performance certificates.
Buying a house is a big deal, and where you are planning to buy will make a difference financially. In this short blog, we look at the most affordable and most expensive areas and how much you need to be earning to buy in there.
Pros and Cons of Equity Release
20 May 2025
Equity release is a type of mortgage that allows homeowners 55 and over to access money from their property's equity without having to leave their home. This is done by securing a loan against the house which is usually repaid by selling the property when the borrower passes away or has to move into long-term care.
More information
Trusted by
