Getting on the property ladder can be extremely hard, especially without a deposit or if your financial circumstances don’t “tick the boxes” for mortgage lenders… if you are on low income or have a poor credit rating for example.
However, with the aid of a ready and willing family member, a Guarantor mortgage may just be a viable option.
Also known as a family-assisted mortgage, a relative can act as a guarantor for the mortgage, thereby taking partial responsibility for the mortgage and agreeing to meet monthly repayments if the borrower is unable to and defaults.
So, if you’re a parent acting as a guarantor for your son or daughter, you will need to meet certain requirements (depending on the lender) such as owning your own home, equity, savings etc.
As a guarantor you won’t hold a share in the purchased property, but your name will have to appear on the title deed, and you’ll be required to sign on the dotted line of any legal documentations specified by the lender.
There are different types of guarantor mortgages available and if this is something you are considering, then we are well placed to advise on the options available across all the UK lenders.