For buyers who fall short on deposit or affordability, a guarantor mortgage can bridge the gap—without the guarantor owning the property.
How it works
A parent/relative guarantees repayments, often securing the loan against their home equity or a savings pledge. If the borrower defaults, the lender can claim against the security. The guarantor may be released once the loan‑to‑value falls sufficiently or a track record is proven.
Eligibility for guarantors
Close family member with strong credit, sufficient income, and property equity or savings. Guarantors must understand full liability.
Benefits
Access with smaller deposits (even 0–5% in some structures), enhanced borrowing power, and no co‑ownership complications versus joint purchase.
Risks
Guarantor’s assets and credit are at risk; long commitments; potential family friction if finances deteriorate.
Alternatives
JBSP (joint borrower sole proprietor), family springboard/savings‑pledge mortgages, gifted deposits, and government schemes.
Example
£200k purchase; buyer deposit £5k; parents pledge £40k savings as security. Lender approves; buyer later remortgages to remove support once equity improves.
Why Everest Mortgages
We source family‑assist products, explain risks to both parties, and compare structures to find the safest, most effective route.
Powerful but serious commitments—seek advice and document everything clearly.
Considering a guarantor approach? Speak to Everest Mortgages at Everest‑Mortgages.co.uk.
