Page 35 - ESPC Magazine Nov 2020

MORTGAGE ADVICE EXPERT ADVICE

WHAT IS A GUARANTOR MORTGAGE? THE CHANGING PROPERTY MARKET

Paul Demarco, Independent Mortgage Adviser with ESPC Mortgages, looks at how guarantor Peter Ryder, Managing Director at Thorntons Property, looks at how home buying
mortgages work. priorities have changed due to COVID-19.

th
The purpose of a guarantor mortgage is With this arrangement, the following criteria Since the market reopened on the 29 June, all period we were not allowed to see parents,
mainly to help first time buyers get on the normally applies: agents have reported record levels of activity. grandparents and other family members.
property ladder by enhancing the borrowing • All borrowers must sign the Mortgage Deed A lot of this was attributed to pent up demand, Many people have therefore realised that
power of the applicant. • It is mandatory that any borrower/s not however the pandemic has also caused a lot they would like to stay closer to family
named on the Title to the property obtain of people to re-evaluate their lifestyles and and friends and are looking for properties
With a guarantor mortgage, the guarantor independent legal advice. priorities moving forward. Due to this, we nearby.
signs up to be liable if the applicant stops have seen clients wanting to move for many
paying back what was owed to the lender. In summary, this can be a complex area and different reasons. Find out more about Thorntons Property at
Therefore, the lender has the right to pursue it is worth seeking independent mortgage thorntons-property.co.uk, or contact the team
the guarantor for any missed payments. A advice before deciding if either of these WORKING FROM HOME on 03330 430090.
guarantor mortgage basically means that arrangements is right for you. Many employers and employees realise that
you are less of a risk, because the lender has a working from home is now a real option
way of getting their money back if you default even after the pandemic is over. It is likely
on your repayments or don’t stick to your ESPC Mortgages is a team of independent that many people in Scotland would like to
agreement with them. mortgage advisers who are specialists in helping continue to work from home in the future
first time buyers. Find out more by contacting if they have the option. On the back of this,
the team on fsenquiries@espc.com or 0131 253 many clients who are actively looking to move
Not all lenders offer guarantor mortgages 2920, or visiting espc.com/mortgages
and those that do tend to enforce a more would like extra space to accommodate a
restrictive lending policy than would normally working environment within their property.
apply to non-guarantor loans. Students are
a common type of applicant along with first THE COMMUTE
time buyers and young professionals that are People are appreciating that they do not need
currently on a low income. to commute to their office every day. They are
now considering their options and looking at
more rural properties, which, in many cases,
The lenders that do market this type of offer better value for money and larger living
product will adopt the following criteria:
space than city living. These properties can
• The guarantor must be a blood relation (for include an annexe or a garage which can be
example, your parents, brother or sister)
The information contained in this article is provided in good converted into suitable office space.
• The affordability is predominantly assessed faith. Whilst every care has been taken in the preparation of the
on the guarantor’s income information, no responsibility is accepted for any errors which, GARDEN SPACE
despite our precautions, it may contain. No individual mortgage
• Any other mortgages or loans that the advice is given, nor intended to be given in this article. During lockdown people became aware of
guarantor has will be taken into account the importance of having their own outdoor
under the affordability assessment. The initial consultation with an adviser is free and without space. This has led to a marked increase in the
obligation. Thereafter, ESPC Mortgages charges for mortgage number of clients looking for properties with
advice are usually £350 (£295 for first time buyers). YOUR
In addition to guarantor mortgages some HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP garden space, especially clients with young
lenders offer multiple borrower mortgages UP REPAYMENTS ON A MORTGAGE OR OTHER LOANS families.
– this is very similar to the guarantor SECURED AGAINST IT.
arrangement and most lenders allow four BEING CLOSER TO FAMILY
applicants on the mortgage application, and ESPC (UK) Ltd is an Appointed Representative of Lyncombe Many of us have realised the importance of
Consultants Ltd which is authorised and regulated by the
some allow students to be the main applicant. Financial Conduct Authority. being near to family. During the lockdown

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