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Can my parents be a guarantor for my mortgage?

For many people deep into their 20s, 30s and beyond they can still find that their parents are checking up on them. This normally involves parents making sure that you are doing things the same way that they would. But not everything is as easy nowadays as it was for your folks… Yes, mortgages can now be the bane of borrowers’ lives, with huge deposits for houses and earning enough income in order to afford their mortgage repayments.

For first time buyers, it’s not easy to get your foot on the property ladder, but guarantor mortgages can be really beneficial for first-time buyers! Why? Because guarantor mortgages don’t need you to have a huge deposit in your savings account.

Although it might seem tedious at your ripe old age, having your parents as a guarantor in a guarantor mortgage can be a great safety net for you in the house buying process. Find out more, below. 

What is a guarantor mortgage?

In simple terms, a guarantor mortgage is where another person uses his or her own money or asset as collateral with the mortgage lender. What this basically means is that if you have found yourself in a position where you were unable to pay a mortgage repayment, then your guarantor would step in and pay on your behalf. Also, rather than you coming up with a deposit on your new home the lender may be happy to use some of the equity in your parents home to cover your deposit.

Can one of my parents be my guarantor?

Of course, they can! While in your adult age you may have been hoping to never use the bank of mum and dad again, your parents can, of course, be your guarantors.

While you might feel slightly embarrassed having to rely on your parents financially in your adulthood you shouldn’t feel this way. Guarantor mortgages are a common and effective way of saving your blushes in the future should you incur any financial hiccups. And the truth is you’ll probably feel much more comfortable having a guarantor that you know and can trust. But, before you get one of your parents to sign on the dotted line there are a few bits of criteria they need to hit. This is to make sure they are an eligible party to your guarantor mortgage.

Before we continue we should note that it doesn’t necessarily mean that they’ll be responsible for ALL of your mortgage. For example, nowadays some lenders only make sure that your guarantor is responsible for paying back some of what you owe.

Criteria for your parents to be your guarantor:

 The first and most important criterion is that your guarantor must own their property outright or have enough equity in the property to meet the lender’s minimum requirement. This usually means that your lender will require your guarantor to own around 30% of their home outright, but this will vary depending on the lender that you applying to.

If you are expected to fulfil your duty as a guarantor this can be quite the financial burden. So, make sure that your mum and dad have an income high enough to help cover repayments if they are called upon. This can be quite a big responsibility combined with their own mortgage repayment commitments and living expenditure so make absolutely sure they have the means to be a sufficient guarantor!

Like any other mortgage application, you’ll need to make sure that your guarantor has a good credit score to ensure that they are financially responsible in the eyes of the lender. It very much becomes two applications in one.

At Mortgages Online we can compare 1000s of mortgage deals for you – to find the one that is right for you. As an added extra, we can also provide you with a life insurance quote on completion of your application, good right? MOST IMPORTANTLY we’re completely free to use! Yes, no credit card info required. Simply start your mortgage search, today.


Laura Waller

Laura Waller has been working in the mortgages industry since 2013, joining an independent brokerage in Essex. Laura has CeMAP 2 & 3 – Certificates in Mortgages Advice and Practice. Since then Laura oversees marketing for Mortgages Online, using her experience and expertise to write articles and blogs about mortgages and related topics.

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