Guarantor Mortgages and the Mortgage Guarantor explained and our help available!
Guarantor Mortgages are a type of mortgage that enable first time buyers to get on the property ladder by assigning somebody as a mortgage guarantor.
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Below we take a look at the Guarantor Mortgage, and how it works, and how we can help with one.
Table of Contents:
What is a Guarantor Mortgage?
So, as we touched upon above, Guarantor Mortgages are a type of Mortgage that enable those seeking to buy their first home to get on the property ladder.
What is a Mortgage Guarantor?
A Guarantor is somebody who has a legal obligation to fulfil a guarantee they have agreed to. So, a Mortgage Guarantor is somebody who agrees to be legally bound to take responsibility for mortgage repayments in the event that the main mortgage applicant defaults in their mortgage payments. The Mortgage Guarantor is appointed at the time of mortgage application and is typically a legal guardian such as a parent or other family member. Guarantors are usually limited to a single guarantor, although this is not always the case.
Why are Guarantor Mortgages necessary?
In today's property market, the average cost of housing stock for the younger buyer has escalated in recent years, and property ownership is now beyond an increasing proportion of the traditional first-time buyer market. This is because property prices are increasing much faster than earnings, and this is the greatest contributor in pushing homeownership further out of reach!
This has led to more and more young buyers turning to their parents or family for help.
How do Guarantor Mortgages work?
There are differing approaches by lenders on Guarantor Mortgages. For example:
- Some lenders will use the guarantor's income to top-up the young applicant's income to provide a higher mortgage amount, whereas
- Others will be based on the guarantor's income alone
- Some lenders have special guarantor schemes for university graduates and young professionals, e.g. trainee accountants, solicitors, architects etc. who are studying for their professional examinations
Whichever method the lender uses, the main feature of a guarantor mortgage is that if the offspring defaults with their mortgage payments, the guarantor would then become responsible for those repayments. Because of this, the guarantor should be advised to take independent legal advice to ensure the implications are fully understood.
It is also important to note is that when calculating the amount the lender is prepared to advance, the guarantor's income will be taken into account in the normal way, less any financial commitments that the guarantor may have in place. Thus if the guarantor has a large mortgage, it could be detrimental to the application.
Can Shire Direct help me if I require a Guarantor Mortgage?
Yes we can, subject of course to you meeting the lenders criteria. Why not call one of our mortgage experts. They will quickly assess your circumstances and requirements, and come up with a rapid in-principle decision.
And remember too that we can often help even if either you or the mortgage guarantor has experienced credit difficulties in the past. We believe you will find our approach to be friendly, yet professional, and we'd love to help. Please don't hesitate to Contact Us if you think this facility would help you. You can enquire online anytime, or call us to speak to one of our friendly and professionally qualified mortgage advisors, our Freephone Telephone number 08000 282 281, is available seven days a week, between 8am and 10pm.
We hope we've managed to explain Guarantor Mortgages, and how they work for you, and have answered any initial questions you may have had about them. Remember, we're here to help, and we'd love to hear from you!
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Are you worried and becoming stressed because you are having problems getting a mortgage or remortgage? Worry and stress no more! Here at Shire Direct we provide tailor made mortgage solutions to suit you, and can usually help with all kinds of circumstances including...
Remember, we're here to help, and would love to hear from you!
Shire Direct and Shire Direct Mortgages are trading styles of Shire Processing Centre Limited which is
Authorised and regulated by the Financial Services Authority in respect of regulated mortgage products and general insurances.
Registered No: 302389. Commercial funding and Secured Loans are not regulated by the FSA.
Licensed Credit Brokers. Consumer Credit Licence Number: 349999.
Shire Processing Centre Limited is registered under the provisions of the Data Protection Act by the Information Commissioners Office: Registration No: Z6795249. Registered in England & Wales. Company number: 2732202. Telephone calls may be recorded for training, monitoring and security purposes. All applicants must be aged 18-years or over.