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Mortgage Advisor & Director
If you’re looking for a guarantor mortgage it can be difficult to understand which lenders offer the most suitable product for your needs. We look at some of the best mortgage lenders offering guarantor mortgage products, and how to secure a suitable home loan with them.
Who offers guarantor mortgages?
Not all lenders offer these agreements, but a good range of both high street and specialist lenders offer guarantor mortgages of one type or another. It’s important to note that there are different types of guarantor products which are referred to under a broad range of names, depending on the product details and the lender. For example, family springboard mortgages are a type of guarantor product while joint borrower sole proprietor mortgages are similar.
This can make finding and comparing every guarantor mortgage out there quite difficult, as the product names don’t always make the fact that they are a guarantor mortgage glaringly obvious. One example of this is the ‘Deposit-lite’ mortgage. Seeking advice from a mortgage broker with experience in this area of lending can help ensure you’ve considered all guarantor mortgage lenders and options before making a decision.
Get expert advice about guarantor mortgages
Best lenders for guarantor mortgages
The best guarantor mortgage lender will vary based on your needs. Some lenders only provide products that allow guarantors to cover your deposit requirement, for example, whereas others will consider the income of your guarantor when calculating the guarantor mortgage loan and repayments.
Below you will find a list of some of the UK’s most reputable lenders that provide guarantor mortgage options:
1. Barclays
Barclays’ Family Springboard Mortgage is a guarantor product that is intended to help those without a deposit. A guarantor uses their savings equivalent to 10% of the property value instead of a deposit. This is held in a ‘helpful start’ account with Barclays for 5 years. The savings can then be returned to the guarantor, assuming the borrowers have kept up with their repayments.
2. Beverley Building Society
Beverly Building Society offers guarantor mortgages as part of its Family-Assist line. There are 3 products under this range; ‘Property Assist’ and ‘Income Assist’. The Property Assist allows a guarantor to secure a legal charge on their property equivalent to 20% deposit on the property being purchased.
The Income Assist is a more traditional guarantor product which takes into consideration the income of the guarantor as well as the mortgage applicants when calculating the mortgage. They also offer JBSP mortgages, which are similar to the Income Assist, but less risky to the guarantor.
3. Buckinghamshire Building Society
Buckinghamshire Building Society’s ‘Deposit Lite’ product allows guarantors to put a legal charge on their property up to the equivalent of 60% of their own property’s value, in order to allow the borrowers a 100% deposit-free loan.
4. Halifax
The Halifax Family Boost product is aimed at first-time buyers, and it allows a guarantor to use their savings in lieu of a 10% mortgage deposit. Their savings are held for 3 years in a Halifax account and returned to the guarantor after this term, assuming the borrowers have maintained their mortgage repayments.
5. Nationwide
Nationwide’s guarantor mortgages are more traditional products aimed at those who do not meet affordability independently, or are high-risk borrowers. They can be used to purchase, remortgage or change ownership of a property when borrowing as much as 85% LTV. They only accept guarantors with a UK-based income and a strong personal relationship to the borrower.
6. Loughborough Building Society
Loughborough offers a range of different family-assisted mortgage products, including family deposit, which allows borrowers to get a 100% loan when their guarantor provides the equivalent of a 20% deposit in savings or by legal charge. They also offer a JBSP mortgage that can be supported by up to 2 guarantors, a family buy-to-let mortgage, and a buy for uni specific mortgage.
7. Skipton
Skipton a guarantor mortgage called ‘Income Booster’ which is a type of JBSP product. It allows borrowers to add up to three guarantors to help them meet affordability requirements, but they will need a 5% deposit of their own. They are fairly flexible in who supports the mortgage, accepting friends as well as family.
Best guarantor mortgage lenders for borrowers with bad credit
Most mortgage lenders offer guarantor mortgages to borrowers with bad credit, often this is their reason for needing a guarantor. However, the guarantor would usually still need to have a strong credit score. It’s unlikely you’ll find many lenders willing to support a guarantor mortgage application when both the applicant and guarantor have a patchy credit history.
There are some lenders who may accept a guarantor with a lower credit score, but this is most likely to be a specialist lender, and it’s best to speak to one of our team for further guidance in this scenario.
How to choose the right guarantor mortgage lender
The simplest way to find a lender who provides the right type of guarantor mortgage product and terms to suit your needs is via a broker, like ourselves. At Teito, we can help you to access specialist lenders, if needed, and can advise you which type of guarantor mortgage would be most appropriate for you.
Here are just some of the benefits of choosing Teito for your guarantor mortgage:
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We compare deals across the entire market, including those only available to brokers
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We specialise in guarantor mortgages, and can offer recommendations for all circumstances
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We can provide a free initial chat to help you get started
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We are 5-star rated on leading review websites
Ready to speak to a broker who specialises in guarantor mortgages? Contact us now.
FAQs
Yes, there are guarantor mortgages available in Scotland. There are fewer lenders available, which means that they could be more difficult to secure, but there are certainly lenders offering them, such as Scottish Building Society and Nationwide.
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.