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Original poster

Can anyone talk to me about guarantor mortgages?

22 replies

mylidlpony · 31/07/2011 09:36

We can't get a mortgage because despite having perfect credit score, having never missed a payment in the 7 years, great bank rating, a 35% deposit and a supposedly portable tracker, my salary isn't big enough to make a very big number timsed by 5. DP is a professional gambler so zero rated for tax and despite having a good income, no mortgage company will touch him with a bargepole.

Our only option is to get someone to guarantee our mortgage.

DP has a very rich uncle who might possibly do this, although we don't know him very well.

Does anyone have any experience of guarantor mortgages and what is involved? Or perhaps another type of alternative mortgage?

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CogitoErgoSometimes · 31/07/2011 10:05

Yes. When my marriage failed and I took over the mortgage 100%, my salary alone - even though I could meet the payments - was not enough to secure it. So my mum acted as guarantor. They wanted to know her financial details, the idea being that if I ever defaulted she would stump up the cash. It didn't seem to be a very complicated process. As soon as I was able I remortgaged it fully in my name. Didn't want mum's finances to be affected for longer than necessary.

feckwit · 31/07/2011 10:13

My parents guarenteed a mortgage for me when I was at university. As CES said, they had to provide details of income so that the mortgage compay were satisfied that they could cover it were I to default.

I moed a couple of years later and took out my own mortgage but could have had them removed if my circumstances chaged ad I could take on teh mortgage myself.

Original poster

mylidlpony · 31/07/2011 10:18

Thanks Cogito. I wish either of our parents could do it but absolutely no way they can. We've recently adopted a child from within the family who was orphaned which is really the only reason we need to move for another bedroom/secondary school issues, so I'm hoping as he's 'family' in the broader sense he will appreciate that it's not our bad financial planning.

Good to know it wasn't too tricky a process.

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Original poster

mylidlpony · 31/07/2011 10:22

That's interesting too, we could give him a number of years before we'll be able to remove him from the mortgage.

I just want to set our request out like a really solid business plan, I think it's the sort of thing he would respond to better.

My gut feeling is he will say no. He turned us down for some money before, a very small amount owed to us by his brother, which we needed when we hand to move to accommodate his little orphaned nephew - so this time I'm aiming for his business head not his heart!

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CogitoErgoSometimes · 31/07/2011 12:27

You'll need to reassure him that you can meet the payments & have a 'Plan B' for what happens if you couldn't. If you can persuade him you are low risk and that he won't be asked to pay anything out, he may say yes. Having said all that, I was glad it was my mother I could turn to rather than anyone more distant. She handled it very well and, even though I felt a huge responsibility not to let her down or cost her any money, she didn't make me feel beholden to her or try to interfere in other ways. Someone else might have done that.

noddyholder · 31/07/2011 12:28

A professional gambler?

Xenia · 31/07/2011 16:07

Some people do make quite a bit of money at poker etc and tour the world winning tournaments. In fact if they are good they can make more than enough to buy houses for cash. Perhaps he needs to get better at the gambling. Plenty of parents guarantee mortgages. However if you don't pay the guarantor has to and most people who aren't clsoe to someone wouldn't want to. I suppose if he is paid something for his trouble and perhaps is even made a co owner of the house legally with you two he might feel much more secure i9n that he could sell the house from under you if you stopped paying the mortgage and once the loan was paid off he would perhaps take some of the balance until you'd got him off the mortgage.

Xenia · 31/07/2011 16:09

I do think there are a few self certified deals coming out of the woodwork again amazingly so so use a good mortgage broker and you might find you don't need the guarantor.

One mortgage broker this year has offered my daughter 5x salary as a loan (90%) by the way which surprised me given the supposed state of the market but she's in a secure profession and income will rise every year. I was amazed.

noddyholder · 31/07/2011 16:23

I know xenia we have one living next door to us but his income and subsequently lifestyle is very variable. I was really questioning someone lending/guaranteeing anyone with that 'career'

Original poster

mylidlpony · 31/07/2011 17:19

Noddyholder yes DP is a professional gambler. Algorythmic trading. He has a phd, an ma in artificial intelligence, writes all his own software and invests in his business. Not a gee gee in sight. He has never had a losing month and a losing week is very rare. Would you say the same of a trader in the city? Sorry I don't mean to sound defensive but so many people raise an eyebrow and ask if the house is in my name! We are not at all poor, but we don't have 300k in cash in a pot in the kitchen to put into a house.

Xenia I was offered 5 x salary (without DP) and we have 35% deposit, but we had a baby last year and adopted at the same time so my income isn't high enough for that to mean anything. Even though DP can show his money going through the bank, and provide books produced by an accountant they won't touch him.

Our mortgage broker has drawn a blank on the self-cert thing, so I'd be really interested to find out if anyone is offering them. Other than that I think we'll have to set it out like a business transaction and perhaps put a limit of 5 years for taking him off the mortgage as by then we won't have the older adoptee living with us.

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noddyholder · 31/07/2011 17:28

Chill out! I wasn't doubting you! The guy I know is similar but has no house either he rents and can't seem to buy although he has flash cars and plenty of income a house alludes him.

noddyholder · 31/07/2011 17:45

You need a broker who can get a self cert for you until you have proof of income and then you can remortgage at a better rate down the road. RBS and chelsea bs used to offer these

noddyholder · 31/07/2011 17:47

Why doesn't he pay tax etc if its like city trading. Lots of self employed people get mortgages

Original poster

mylidlpony · 31/07/2011 18:02

ok, am relaxed now .

It's like city trading, he does bet on financial markets but for himself, i.e. whether a market will go up or down in the next fifteen minutes (utterly ridiculous but there you go) whereas I suppose city traders operate under the umbrella of a company for clients. Not really sure about the ins and outs but we have had legal and accountancy advice. And he pays 40% of all his earnings to Betfair!

I've looked at lots of self-cert sites on the Internet but they all say the product has been removed.

He had a mortgage before, quite a big one, with Nationwide, but they won't touch him now. Policies have changed. I've got one that supposed to be portable but they will only port some of it because my earnings have gone down.

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noddyholder · 31/07/2011 18:10

Would you consider renovating a few until you had built equity? I had to stop work because I had a serious illness and that is what we did

Original poster

mylidlpony · 31/07/2011 18:16

Noddy I'd love to. The thing is, despite our best planning we seem to have acquired two children in the past year and DP needs somewhere to work from home. So we now need a 4 bed. We also need to get out of London back to Brighton to get the teen out of his current school. We looked at a 4 bed in Brighton that needed completely renovating but it was still going for 390k which is about the value of our London flat. And there wasn't much money to be made in it either, the ones in that street that had been done up were languishing on the market for about 460.

We are also a bit fussy about area, post code for secondary school and want to be near the sea...

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noddyholder · 31/07/2011 18:17

I am in brighton !

Original poster

mylidlpony · 31/07/2011 18:32

I know! I was once going to a mumsnet meet up there but DS was late and I was all busy pushing him out . Then we moved to London and then things got all complicated when we got DP's DN (DP's sister and her husband died a while back and we now have their son to bring up). We want to get him into Varndean or Dorothy Stringer. We're very unhappy with his London school. We could buy a wreck, I would love to do it up, but DP is not the handy sort at all so long weekends in B&Q are out of the question.

I feel awful asking DP's uncle to guarantee it, but he does at least know DP's background and I can provide years of accounts for my business (also freelance). Also, with 35% deposit I would have thought we are not a bad risk at all.

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Original poster

mylidlpony · 31/07/2011 18:35

My mortgage company turned me down even though in 2005 they were literally throwing money at me. I got a 100% mortgage with no deposit, interest only (tracking 0.5 over base rate, I wonder why they don't want to keep me now eh )

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noddyholder · 31/07/2011 19:02

My ds went to stringer can thoroughly recommend. You could buy a house in the hollingdean area which is in the catchment for great schools but not as desirable as fiveways etc renovate and move on. I have renovated 2 in that area and it really worked out for us. I have just finished another and we are on teh move again to our permanent house back in that sort of area You have done a great thing taking on your dn. If you want any advice re areas etc and houses PM me x

Xenia · 31/07/2011 19:49

Don't they allocate state secondaries Brighton by totally random lottery?

I can 't remember where I read about some self certifieds coming back so I may be wrong and I haven't looked into them. If it's a big enough loan the private banks can be quite helpful. Also try agents such as Wes Ranger at willowprivatefinance.com - [email protected] who helped the author of Oranges are not the only fruit to get hers - she wrote about it in The Times. Writer, hard to prove income etc.

I was just surprised my mid 20s daughter would be offered such a good deal. May be once she's got a bit further in the process it will go wrong.

Original poster

mylidlpony · 31/07/2011 20:31

I heard that too, Xenia, but on the website they show catchment areas by post code, so perhaps they got rid of that system.

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