Guarantor mortgages are an effective way of getting yourself onto the property ladder with an extra helping hand from a trusted third party.
Guarantor mortgages are an effective way of getting yourself onto the property ladder with an extra helping hand. With a guarantor mortgage, a parent, guardian, or close family member guarantees the mortgage debt. This is often done by using the guarantor’s property as collateral against the debt.
There is a greater choice of Guarantor mortgages on the market now that limit the amount of debt the guarantor is liable for, lowering the potential risks involved should payments be defaulted. Of course, if the payments are made without fail, then it won’t cost the guarantor a penny. Guarantor mortgages are still available in the current marketplace, with approximately 40% of lenders offering this type of facility. In general, the guarantor must be a close family member, such as a parent and other factors may be considered.
Examples of these factors, as well as the different varieties of Guarantor Mortgages, are as follows (although these vary from lender to lender):
