First-time buyers


Guarantor mortgages allow a parent or close family member to guarantee any shortfall in a mortgage not covered by the borrower’s income.

So, someone that may want or need to buy a property but doesn’t have the income to support the loan can opt for a guarantor mortgage - provided the family member can afford to repay it.
The parents need to show that their own mortgage is near to finishing or that they have a high income. They can put the mortgage in the child's name, acting as guarantor, or they can buy the property as a buy-to-let.

There are a number of lenders who operate these schemes. The borrower can earn as little as £15,000, as long as they are able to show that they will be earning enough within five years to take on responsibility for the mortgage on their own.
For example:
You earn £20,000 and you want to borrow £90,000 to buy a house priced at £100,000.  On average you are likely to get a loan for around £70,000.  In this case you could get someone to act as a guarantor (usually a family member) where their income would also be taken into account to enable the higher borrowing required.