Guarantor Mortgages

Guarantor Mortgages

Guarantor Mortgages: Your Comprehensive Guide

Getting on the property ladder in the UK can be a challenge, especially for first-time buyers. If you have a limited deposit, a poor credit history, or a low income, securing a traditional mortgage can be difficult. This is where guarantor mortgages come in. This guide explores everything you need to know about guarantor mortgages in the UK, from eligibility to benefits and the application process.

What is a Guarantor Mortgage?

A guarantor mortgage is a type of mortgage where a second person, known as the guarantor, agrees to be legally responsible for your mortgage repayments if you fall behind. This additional security reassures lenders, making them more likely to approve your mortgage application even if you wouldn’t qualify on your own.

Here’s how it works:

  • You, the borrower, apply for a mortgage with a lender.
  • You nominate a guarantor, typically a close family member or friend who owns their own property.
  • The guarantor undergoes credit checks and affordability assessments.
  • If approved, the guarantor signs a legal agreement guaranteeing the mortgage repayments if you default.
  • As long as you keep up with your mortgage payments on time, the guarantor won’t be involved.

Important Note: The guarantor doesn’t own any share of the property you purchase with the mortgage.

Who Can Get a Guarantor Mortgage?

Guarantor mortgages are a good option for several groups of people in the UK:

  • First-time Buyers with Low Deposits: If you struggle to save a large deposit (typically 20-25% for a standard mortgage), a guarantor can help you secure a mortgage with a smaller deposit (often as low as 10%).
  • People with Poor Credit History: A guarantor’s strong credit score can offset a weaker borrower’s credit history, increasing the chances of mortgage approval.
  • Those with Unstable Income: If you have a variable income, such as those starting a business or freelancers, a guarantor’s stable income can improve your application.

However, guarantor mortgages aren’t for everyone. Here are some things to consider:

  • Guarantor Requirements: The guarantor must be a homeowner in the UK, with a good credit score and sufficient equity in their property (usually a minimum percentage of the property value).
  • Stricter Eligibility Criteria: Lenders may have stricter affordability checks for guarantor mortgages compared to standard ones.
  • Potential Strain on Relationships: Guarantor mortgages can put strain on relationships if the borrower defaults on the mortgage. Open communication and clear expectations are crucial.
Excellent
Based on 52 reviews
Georgiana Olescu
Georgiana Olescu
2024-04-10
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Paul is an amazing broker, very helpful, responsive to emails and patient with customers. The process with him was quick and easy as his work ethic is impeccable. We are beyond impressed and happy with his services and that we got to work with him.
Valerie O
Valerie O
2023-12-28
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Exceptional service provided by Paul, I could not have asked for better. Definitely does his due diligence and goes above and beyond. Highly recommended!
Bonnie Frost
Bonnie Frost
2023-12-25
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Paul is a fantastic advisor and guided my husband and myself through the entire process of buying our first home, he made the entire process feel easy and we were well informed along with great communication and fast action. We completed within 3 months of contacting Paul.
Johnathan Lowery
Johnathan Lowery
2023-11-16
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Working with Paul has been a hugely positive experience. Paul took the time to understand our needs and financial situation, ultimately securing us a mortgage deal that we would not have been able to obtain on our own. His guidance and patience over an extended time was invaluable in guiding us through a volatile period in the property market. I highly recommend working with Paul at Your Property Financial.
Adeel Sarwar
Adeel Sarwar
2023-10-02
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It has been great working with Paul. He helped us to redeem our help to buy equity loan which didn't seem possible to me when I first contacted him. It took much longer than expected due to many obstacles but Paul explained every step of the process very clearly and he regularly communicated with me to ensure the remortgage went through as efficiently as possible. I would definitely recommend working with Your Property Financial.
Jessica
Jessica
2023-08-29
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I would highly recommend Paul as a mortgage broker. As a first time lone buyer I began the process feeling very out of my depth, particularly in a market where mortgage rates are very high. But from the get go Paul provided reassurance and practical guidance and has been immensely helpful throughout the process. I've really appreciated his responsiveness, honesty and support.
Louise Griffiths
Louise Griffiths
2023-08-28
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I reached out to Paul 2 years ago and giving this review now because I wanted to ensure that I could give a true review of what benefits I have experienced from using his service. I am thrilled with the financial expertise given to me by Paul. His skillful negotiation secured me an excellent mortgage rate within a short turn around time. This has not only set me on the path to paying off my principal balance but has also allowed me to simultaneously build a solid emergency fund. His initial guidance has been invaluable in shaping my financial future. I look forward to working with Paul again, once my 5 year plan is near its end. Highly recommended!
Calum Hebron
Calum Hebron
2023-08-05
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Paul has been consistently excellent, ensuring we got the best possible mortgage deal at a time when rates weren't great. Paul worked with us to understand our financial complexities and went above and beyond to ensure they were understood by mortgage providers. We've been made to understand every stage of the process, and as first time buyers we were able to feel confident in the decisions we made. I would highly recommend working with Paul at Your Property Financial.
Czarina
Czarina
2023-08-04
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My almost a year-long journey with Paul as my broker has been truly amazing, despite a few hiccups during the mortgage process. Working with him has been the best decision ever! As a first-time buyer, I lacked knowledge about purchasing a home, but Paul's guidance and expertise were outstanding. He explained things in a clear and concise way. What impressed me the most was Paul's responsiveness. He promptly addressed all my questions and concerns, never making me feel like a bother. Even when I faced challenges, Paul's determination and problem-solving skills were unwavering. I felt so supported throughout the entire process. Thanks to Paul's unwavering support, I managed to reach this point. I highly recommend him to anyone, especially fellow first-time buyers. Paul's knowledge, patience, and reliability are unmatched. He's not just a broker; he's an invaluable ally in this complex process. Thank you, Paul!
Alistair Prestidge
Alistair Prestidge
2023-07-11
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Paul helped me to get my Mortgage approved in less then 48 hours! He has been great and I can’t recommend him highly enough. His communication is excellent, and he helped me understand each stage of the process easily. Thank you so much for helping me buy my very first home! I will most certainly be recommending Paul to friends & family!

Can You Get a Guarantor Mortgage?

Whether you qualify for a guarantor mortgage depends on your individual circumstances and the lender’s criteria. Here’s what you can do to find out:

parent guarantor home loan
  1. Assess Your Finances: Evaluate your current income, savings, and existing debts.
  2. Check Your Credit Score: A good credit score will improve your chances of qualifying, even with a guarantor. Aim to improve your credit score before applying.
  3. Find a Suitable Guarantor: Choose a guarantor who meets the lender’s criteria and understands the full implications of their role.
  4. Talk to a Mortgage Broker: A specialist mortgage broker can assess your situation and recommend lenders offering guarantor mortgages with suitable rates and terms.

4 Benefits of Getting a Guarantor Mortgage (if you qualify)

While guarantor mortgages have their drawbacks, there are also potential benefits to consider:

Mortgage Brokers: Essential Help for Securing Your Guarantor Mortgage

The application process for a guarantor mortgage can be more complex than a standard mortgage. Here’s how a mortgage broker specialising in guarantor mortgages can be invaluable:

mortgage advisor
  • Expertise: They have a deep understanding of the market, lender criteria, and the best guarantor mortgage products available.
  • Comparison and Selection: They can compare deals from multiple lenders to find the one with the most competitive rates and terms for your specific situation.
  • Streamlined Application Process: They can guide you through the application process, ensuring you submit all the

Making Your Guarantor Mortgage Journey Smooth

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