guarantor mortgage for daughter

Answered on 25 January 2019 by Nick Morrey

My wife and I own our on home valued at £300,000 without a mortgage. Our daughter wants to buy a house and we could raise about £25,000 deposit. Could she get a mortgage with a charge on our property as guarantor? She only earns about £15,000 pa at present and looking at property about £150,000.

The main issue with looking at a guarantor scenario is that there would appear to be too big a gap between the mortgage your daughter would need to complete the purchase and the amount a lender would normally be prepared to lend her. This would mean that they may want you to come on the mortgage with her.

Alternatively if you are happy for there to be a charge on your property, then the simplest way to go forward would be to see if we can raise the balance of the purchase price as a normal mortgage against your home, and then use the cash to buy the property for your daughter. You can set up a legal agreement regarding the repayment of the loan, and the contibution to be made by your daughter.

I'd suggest speaking to one of our consultants on 0344 346 3672 and they'll be able to go through the options available to you in more detail.

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.


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