Content Writer
Mortgage Advisor & Director
It can be difficult to get onto the UK property ladder these days, with house values pushing up deposit requirements and interest rates impacting affordability. The good news is, there are multiple mortgage options available to those needing a little extra help to buy a home.
We look at how guarantor mortgages work, what the criteria are for both guarantors and applicants, and how a broker like us can help you to secure one.
What is a guarantor mortgage?
Guarantor mortgages allow someone to financially support your mortgage application if you cannot meet the mortgage lender's criteria on your own. This provides additional security for the lender, as the guarantor is liable for any mortgage payments you miss.
A mortgage guarantor does not appear on the deeds to the property, nor have any ownership of any part of the property, they are simply named in support of the loan. Usually either their home or savings are used as collateral, depending on the type of guarantor mortgage used.
How they work
So long as you keep up with your monthly mortgage repayments, a guarantor mortgage does not differ too much from any other mortgage. The only difference is that both the borrower(s) and the guarantor are legally responsible for the debt.
Each lender offering a guarantor mortgage has slightly different terms and conditions. Some may be referred to as family assisted mortgages, and others as JBSP mortgages (Joint Borrower Sole Proprietor). Essentially, any mortgage that is financially supported by someone other than the main applicants could be referred to as a guarantor mortgage.
Eligibility criteria
The criteria for applicants is typically the same as any other mortgage application, but they can be more flexible, as the guarantor helps you to meet certain criteria. That said, the closer you are to meeting the lender’s criteria independently, the easier it will likely be to get accepted with a guarantor.
Much like any other mortgage application, you will need to be able to prove that you have a stable income, and have a reasonable credit history. You’ll also need to meet any minimum and maximum age limits, and citizenship requirements.
Who can be a guarantor?
A mortgage guarantor is often equally or more rigidly assessed than the mortgage applicant, as agreeing to pay for someone else’s home if they fail to is a significant responsibility. Due to this obligation, most lenders prefer close family members, such as parents or grandparents to perform the role of a guarantor.
Some more flexible lenders may also be willing to consider less immediate relatives, such as siblings, aunts, uncles or cousins. In very few cases,certain guarantor products, like JBSP mortgages may even allow for friends or business partners to support a mortgage.
What criteria do they need to meet?
The criteria for being a guarantor for someone else’s mortgage depends on how the guarantor is securing the loan:
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If their home is used as collateral, this will usually need to be mortgage-free, or have a very small LTV remaining on the mortgage loan
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If savings are used as collateral, there will usually need to be a minimum deposit made into an account with the mortgage lender, which will be unavailable to them for a set length of time
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The guarantor will usually need to be a homeowner, whether they are using savings or property as collateral
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They will need to be aged 21 or over
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There is also a maximum guarantor age limit, which typically applies to the age they are once their responsibility as a guarantor ends, not starts. Not all lenders will allow a retired person to be a guarantor
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They generally need a history of clean credit
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They will need to pass affordability check for the mortgage repayments, in addition to their own living expenses
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Lenders often require guarantors to take independent financial advice to ensure they are fully aware of their obligations and the risk to their assets
How much could you borrow with a guarantor?
Some lenders will allow you to borrow up to 100% of the property’s value with a guarantor mortgage. However, some people use a guarantor mortgage to borrow more than they would usually be able to with the deposit that they have available.
This varies from lender to lender, and depending on the type of guarantor product you use. It’s always recommended that you speak to a knowledgeable broker, like ourselves, when looking into specialist mortgage products.
How to get a guarantor mortgage
It’s a good idea to understand all of the options available to you before you decide on a guarantor mortgage. Each option has a different requirement of the guarantor, and different criteria to meet, so ensure you know exactly what you need to ask of the person performing the role of guarantor before you approach them.
One of our mortgage brokers can compare every guarantor mortgage available to you, and help you to discuss your chosen option with a guarantor, once you’re ready to apply.
Connect with a guarantor mortgage specialist
Which mortgage lenders offer them?
There are a range of high street and intermediary-only lenders offering guarantor products, including:
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Barclays: Family Springboard Mortgage (guarantor)
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Beverley Building Society: Family-Assist
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Buckinghamshire Building Society: Deposit Lite
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Loughborough Building Society: Family Assist
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Mansfield Building Society: Family Assist
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Tipton & Coseley Building society: Family Assist
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Halifax: Family Boost
You can find out more about the available providers in our guide to guarantor mortgage lenders.
Why get a guarantor mortgage?
There are a range of reasons that you may find a guarantor mortgage helpful, but it’s usually if you can’t meet mortgage lenders’ criteria to borrow the amount of money you need. This could be because:
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You only have a small deposit or no deposit
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You have a history of poor credit
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You have a low income that is unable to cover the monthly repayments
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You have too little proof of income, or your income is inconsistent
Any applicant that is deemed too risky by mortgage lenders may be able to qualify with a guarantor, however, most commonly it’s useful for first-time buyers.
Why choose Teito for your guarantor mortgage?
At Teito we can provide bespoke advice to both the applicants and the guarantor who are looking to use a guarantor mortgage. We have access to the whole market, so can compare a wide range of deals to find the most suitable for your needs.
Others looking for guarantor mortgage have chosen us because:
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Our brokers specialise in guarantor mortgages
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We are 5-star rated on leading review websites
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Your initial consultation is free of charge
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We can help you secure an agreement in principle in minutes
If you’re ready to take advantage of a free, no-obligation chat with a broker who specialises in guarantor mortgages, get started here.
FAQs
This varies based on your own circumstances, and the lender criteria. Typically, a guarantor is linked to the mortgage until the borrower has repaid a set proportion of the loan.
Some lenders require the borrower to have repaid the loan for a set number of years, others may base it on a set number of repayments, or a specific loan-to-value.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.