New - Limited Liability Guarantor Mortgage

Following the recent budget, first time buyers purchasing properties worth up to £250,000 will no longer have to pay stamp duty. However, this means that parents who are home owners (or have previously owned a home) can no longer buy together as joint purchasers with their children to help them get on to the property ladder, if they want to take advantage of this new stamp duty exemption.

One option is for the parent to act as a guarantor on the mortgage.

Most guarantor mortgages need the guarantor to take full responsibility for the mortgage and the mortgage payments, in the event the borrower defaults. However, with this new scheme, the borrower has to be able to afford a minimum of 70% of the mortgage, and the guarantor then only has to guarantee the difference plus an additional 10%.

In this way, even if the guarantor has a mortgage or other financial commitments, they may fit within the lender's affordability criteria more easily.

If you are considering buying your first home, and want to discuss your options, then give us a call on the number above for a FREE no obligation chat.