Different types of guarantor mortgage

Pete Mugleston

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There are two main types of guarantor, whole loan guarantors and shortfall guarantors. Every lender is different in the criteria needed for mortgages with guarantors; most require the guarantor to afford the whole of the loan, with a select few just requiring the guarantor to afford the shortfall.

Whole loan guarantor:
This is the most common guarantor criteria. With lenders aiming to reduce the risk involved for themselves, most require the guarantor to accept responsibility by providing cover for the whole of the mortgage. This means that the parent guarantor would have to be able to prove they can afford the entirety of the loan. If a borrower requires a mortgage of 140k but can only prove to afford 110k, the guarantor would still need to have ample income to cover the whole 140k. This may not be possible for some guarantors, especially as the lender will also take into account any other outgoings such as their own mortgages and other credit commitments.

Shortfall guarantor:
Rare, but a possibility with some lenders, shortfall guarantor mortgages only require the guarantor to cover the surplus or remaining amount that the borrower can’t afford. For example, if a borrower needs a mortgage of 140k, but can only afford 110k, the guarantor would have to prove that they can afford the outstanding 30k.

For more info on guarantor mortgages use our Nav bar on the right.

If you want to apply for a mortgage with a guarantor, maybe you want to know if you’re eligible or you’re looking for the best deals, please get in touch and one of the experts we work with will be in touch ASAP. If you require help immediate assistance please call 0800 304 7880.


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