anybody got a clue about mortgages and guaruntors who can enlighten me???

[tiredemma]

hi, this year we will be hoping to move house, we have about £9000 saved at the moment but when we spoke to a mortgage advisor, because my wage is such a pittance when we add it to my partners , we still wouldnt be offered a mortgage that would by us a 3 bed house in the areas where we are looking, (it would just about cover a 3 bed in the area where we live which dp is adament he doesnt want to bring up the boys.
his dad made a suggestion a few weeks ago and now we are considering taking him up, but i dont really understand how it works and we dont want to go to his dad and discuss without having a clue, as he will think we are just being ignorant.
he has offered to be guarutor for us... great but what does that mean???
we are visiting them in a few weeks and i know the subject will come up..... could any of you "worldy wise " ladies help me in discovering the ins and outs of this???!
thanking you xxx

It means that he will guarantee the borrowing to the mortgage company, so if you can't pay the part of the mortgage he is guaranteeing then he will have to pay it for you.

EG if you can borrow £100k but the house you want is £150k he can guarantee the £50k on your behalf. So if you default on a mortgage payment then the bank can go to him and demand payment.

Not entirely sure if he will have to guarantee the lot or just the 50k in this instance.

HTH

A gurantor doesnt actuallt pay anything to the mortgage rather acts like a gurantee that it will be paid.This can involve him legally stating that you can afford the payments and if you default he will pay.It is a good way to increase your chances.Also northern rock do a mortgage called together which is pretty good if things are tight they have just increased our mortgage based on what we spend rather than exact income.Hope this helps.

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Hi Emma, We are currently talking about doing the same thing actually. We are in a similar position to you, and need a bigger mortgage than our lender will lend us, and my FIL offerred to be guarantor for the extra £30,000 that we need. This basically means that we take out a mortgage for the maximum we are allowed to borrow, and FIL is a guarantor for anything over this amount. So, should we fall into arrears with mortgage payments they can repossess the house, and FIL is liable for 'his' amount. However, when I called our lender to see how we would go about this, they said this was an old fashioned method and they don't do it like this anymore. What we would have to do is put FIL on the whole mortgage, so we could lend more, but if we fall into arrears then FIL would be liable for all of the mortgage. IYSWIM. Sorry if this is a bit garbled! I would ring your lender and see what they say.
Hope this helps

Also if he is a guranator for the extra £50K or so then your mortgage payments will be higher. Make sure that you can cover them.

thanks a lot everyone, all of your info has been really helpful...

northener, let me know how you get on!

kaz33, we could afford a fairly substantial mortgage, its just that if the lender is only only offering 3.5x our wage, with house prices the way they are, it doesnt go far!!!

Have you tried all the mortgage providors. We are taking out a new flexible mortgage with Intelligent Finance, and the amount they have offered us is about 5 times our combined wage (don't worry everybody we are only taking the full amount for the two months that we are keping both properties) I think Northern Rock also base it on affordabilty rather than a multiple of wages. (of course make sure you really can afford the repayments een if rates rise)

Northern rock are really good have a look on their website you can get a basic decision online.I did this monday and got a proper agreement over the phone tuesday

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