Guarantor Mortgages

A guarantor mortgage is typically arranged where a relative (sometimes a friend) wishes to help guarantee the affordability of a mortgage.

This is often where the amount of mortgage required would not necessarily have been achievable in the name of the mortgage applicants alone without the guarantor. Guarantor mortgages are sometimes called “Joint Applicant Sole Proprietor” where one or more persons go onto the mortgage application but fewer go onto the ownership of the property as registed on the Title Deeds. A typical example is parents buying with son/daughter where parents and son/daughter go onto the mortgage application but only son/daughter onto the Title Deeds.

The usual scenarios where guarantors are typically used are in the case of parents acting as guarantor for children who may be studying or who have just started their career where their income is expected to grow, but they can’t yet afford the mortgage amount they require on their own. Alternatively, it could be children acting as guarantor for their parent’s mortgage.

Unfortunately, guarantors cannot be used to make up for the fact that one or more of the mortgage applicants have an adverse or an impaired credit history. In these scenarios, Guarantors can still be used to assist with the affordability of the mortgage, however the lender would also need to be comfortable with the credit history of all applicants before deciding whether to proceed.