Could a guarantor help you secure a mortgage?
Paul Demarco, Mortgage Adviser at ESPC, talks us through this topic.
A guarantor, in relation to a mortgage, is someone who is responsible for the mortgage payments.
The guarantor will give a fall back to a lender in case the applicant defaults on their repayments. Basically, they sign up to be liable if the applicant stops paying back what they owed; therefore, the lender has the right to chase the guarantor for any missed payments. Their guarantee basically means that you are less of a risk because they have a way of getting their money back if you don’t stick to your agreement with them.
There are currently very few lenders that offer guarantor mortgages. The ones that do, typically require you to have a 15% deposit. University students are a common type of applicant who have no income and have a parent as a guarantor, paying a mortgage instead of rent and this can potentially be a good investment. Low income applicants are acceptable to some lenders with guarantor mortgages.
In summary, this can be a complex area and my advice is to seek independent mortgage advice. If you require advice in this area or for all your mortgage and financial needs, please come and talk to me as I would be more than happy to assist you.
Want to know more?
Paul Demarco is a Financial and Mortgage adviser who helps clients with all their mortgage needs and requirements, identifying any other gaps that they may have and advising on a solution to any potential gaps. You can call him on 07778 066595 for more information.
Read some of Paul's other articles:
- Independent financial advice
- The buy-to-let mortgage market
- Can you tell me about re-mortgaging?
- 2013 - Lucky for some
The initial consultation with an adviser is free and without obligation. Thereafter, ESPC Mortgages charges for mortgage advice are usually £350 (£295 for first-time buyers). YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOANS SECURED AGAINST IT.