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Guide to Guarantor Mortgages

    Guide to Guarantor Mortgages


    With a guarantor mortgage the potential borrower can ask another person (generally a close family member) to stand as a guarantor for a period of time.

    A guarantor will enable the potential borrower to borrow the money, as the lender will base its affordability on the guarantor’s income and status rather than the applicants.

    Traditional guarantor mortgages helped those who would usually not have enough income for mortgage payments.

    Now with raising a deposit, often the biggest problem for those trying to get a foot on the property ladder is that there are new products that allow a relative to provide a percentage of the deposit in the form of savings.

    This guide will outline the key considerations for borrowers contemplating taking on this type of home loan, the different ways these loans work, the pros and cons of this type of deal and alternative mortgages that are currently available.

    Supporting material produced by: Jeremy Duncombe, director of Legal and General Mortgage Club; Shaun Church, director at Private Finance; Christine Newell, technical director at Paradigm Mortgage Services; and Dale Jannels, managing director of Atom.

    In this guide


      Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

      1. Within what time period does a lender wants to ensure a customer will be able to afford the mortgage, according to Mr Duncombe?

      2. What does the guarantor typically agree to?

      3. What does Mr Duncombe say you can do to ensure the house cannot be sold without your permission?

      4. If they own a share of the home, does the housing association have the right to find a buyer for it?

      5. Which of the following lenders was NOT listed in this guide as offering family assisted or family guarantee mortgages?

      6. What does Ms Newell say was the maximum liability amount for limited liability guarantor mortgages?

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