Guarantor Mortgages for Post Graduate Students PHD Students or Graduates In many cases those studying for a PHD or Post Graduate Students get a bursary. Although these bursaries are usually regular, guaranteed income I have yet to find a lender that would accept this as acceptable income for mortgage purposes. In a case like this parents can be used as a guarantor to help the applicant get accepted for a mortgage. As the broker we need to be clear that the applicant can afford the mortgage. In addition the guarantor  lender is normally satisfied that the income of the student will be increasing in the future and become acceptable, therefore the guarantor removal has a clear plan. For a graduate or new trainee a similar scenario exists. For example a trainee accountant, teacher, doctor, lawyer etc normally starts off on quite a small salary. The smaller salary in many cases is not sufficient to get the size of mortgage that they require. Again parents, grand parents or a close relative can be used as a guarantor. As above the lender can see a clear plan on when and how the guarantor can be removed i.e. when the applicant gets a pay rise due to more experience. When this does happen the guarantor can be removed.

Mortgage with Guarantors for No or Low Deposits These days in order to get a competitive rate a reasonable size deposit is needed. Even with a 10% deposit the rates on offer a much higher than that if lower loan to value mortgage of 25% deposits. In addition getting a 10% deposit together can be a difficult task. With house prices averaging around £160,000 that would be £16,000 to find in order to get a 10% deposit mortgage. Some guarantor lenders offer the option to put a charge on your parents or grandparents property. This way a first time buyer can raise a mortgage with no deposit down. The parents or grand parents property needs to have sufficient equity within it for the new guarantor lender to take a charge on. In cases like this the applicants income will need to be adequate to support the new mortgage.

Guarantor Mortgages for The Self Employed To apply for a standard mortgage if you are self employed or a director of your own limited company you normally need to supply 2 or 3 years worth of accounts. Many new businesses cannot supply these proofs or many start-ups have low earnings for the first few years and then will increase their profits in future years. This type of scenario is perfect for a guarantor mortgage. If the applicants parents, grand parents or close family member has an adequate income to support the mortgage then they can become a guarantor. The lender is happy because they can see a clear plan of when and how the guarantor can be removed i.e. when the self employed person has accounts that are sufficient to support the mortgage in their own right.

Guarantor Mortgages using Parents or Grandparents Savings Another type of mortgage that can use a guarantor is where a parent or grand parent puts down 25% of the property value as security. This sum is then held by the lending bank or building society and pays a reasonable interest rate. This allows the applicants to borrow up to 100% of the purchase price. This is a good product as any many cases parents would like to help their children get on the property ladder but do not want to give them the large 25% deposits out right. The 25% deposit can then be given back to the parents when either the equity in the home is 25% or they remortgage to another lender using savings and equity.