We are well aware that in many cases a couple who wish to divorce may have difficulties in raising adequate mortgage to enable themselves to be re-housed.
An option that may be of interest is a range of mortgages designed to help people with limited income to either purchase a property or to remortgage.
The lenders would use the guarantor’s income rather than just the applicant’s income to support the loan.
Maximum borrowing is commonly 85% loan to value or purchase price.
Option 1 – Full Liability Guarantor
The client wishes to buy a property priced at £100,000. Her parents can afford to guarantee the whole of the loan, so she qualifies for a full liability guarantor mortgage at 85% loan to value. Her parents must be able to prove that they can afford her entire monthly payments plus their own commitments.
Property price £100,000
June borrows £85,000 (85% of loan to value)
Parents guarantee 100% of the loan.
Option 2 – Limited Liability Guarantor Mortgage
This provides a client with more options if they are struggling to get a mortgage, where the borrower only needs to be able to afford 70% of the loan themselves and rather than the full amount, the guarantor guarantees the difference plus a further 10%.
Commonly many parents are willing and able to guarantee a smaller sum and this provides a much needed alternative to the standard full liability option described above.
If you would like further information of these guarantor mortgages, or in due course have clients who you feel that it may benefit, then please do not hesitate to contact me.
We are increasingly receiving requests to provide reports on the mortgage-ability of clients, and again if you would be interested in more information on these reports, then please do not hesitate to let me know.