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EXPERT ADVICE

What is a guarantor mortgage?

ESPC Mortgages’ Paul Demarco shares everything you need to know The guarantor doesn’t need to be a blood
about guarantor mortgages. relative – a friend can be a guarantor if they
meet the criteria.

the age of the guarantor; the average age
for parents acting as guarantors is around
50-55, meaning that the mortgage term
could be around 15-20 years.

Some lenders only require a 5% deposit,
but 10% is more common. Gifted
deposits can be used for guarantor
mortgages, and some lenders will now
accept deposits that have been gifted by
friends, although many prefer immediate
relatives.
Guarantor mortgages are only available
for residential mortgages and cannot be
used for buy-to-let mortgages or shared
equity schemes. There can be up to four
applicants for the same mortgage, and
all applicants can reside in the property,
making this a popular choice for siblings
or friends choosing to buy a home
together, with the help of a guarantor
Usually, the guarantor is the applicant’s – however, independent legal advice is
guarantor mortgage, more commonly
required for all applicants.
known as ‘sole proprietor/joint
parent/s, and the applicant is a student or
A borrower’, is a type of mortgage where low-income earner. However, the guarantor
the applicant’s borrowing power is enhanced doesn’t need to be a blood relative – a friend
by the security of a higher earner forming part can be a guarantor if they meet the criteria.
of the application, effectively helping first-time ESPC Mortgages can help with all aspects of understanding your budget, applying for a mortgage and dealing with the
buyers to get onto the property ladder. Not all lenders offer guarantor mortgages, relevant insurance requirements. You can contact the ESPC Mortgages team on 0131 253 2920.
and those that do tend to enforce a more
The guarantor is liable for the mortgage if the restrictive lending policy than would
applicant stops making repayments to their normally apply. Affordability is predominantly The information contained in this article is provided in good faith. Whilst The initial consultation with an ESPC Mortgages adviser is free and
lender. The applicant is therefore less of a risk, assessed on the guarantor’s income, with every care has been taken in the preparation of the information, no without obligation. Thereafter, ESPC Mortgages’ charges for mortgage
as the lender can recover their money if the any mortgages or loans they have taken into responsibility is accepted for any errors which, despite our precautions, advice are usually £395 (£345 for first-time buyers). YOUR HOME MAY
it may contain. BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A
applicant defaults on repayments. account. The mortgage term is determined by MORTGAGE OR OTHER LOANS SECURED AGAINST IT.
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