Parents as guarantors for mortgage?

After a lot of effort I found that RBOS would

Mark BR

See an IFA - if they can't help, you're stuck where you are.

Artie

Not sure about that. If you can't get someone to structure the deal as you want you could ask your parents to remortgage their house and then enter into a separate loan agreement with you. This would require a lot of trust on their part - i.e. lending you £200k without ant security.

In the event of a guarantee I doubt a mortgage company needs any more collateral - they just need to see more capacity to make the payments to service the debt. So a guarantor would only need to demonstrate their income and obligations but would not need to pledge additional property.

Tony

In message , snipped-for-privacy@britcoms.org.uk writes

Please tell us more about what you are trying to achieve. Offering collateral security isnt the same as getting a guarantor.

In answer to your first question, yes loads of proper banks accept collateral security for loans in addition to direct security but usually not when lending on domestic mortgage rates. 'Mortgage lenders' generally wont.

In answer to your second question, all proper banks accept guarantees as security, but only some of them accept them to support mortgage type loans at domestic mortgage rates. Only a few Mortgage Lenders will accept guarantees and then only in quite specific circumstances.

I can raise about 200k on my existing mortgage with no problems. My parents are willing to use their property as collateral to raise the remaining 200k I need, but it is evidently a difficult business to actually use their property to get this sum. They are retired and their income certainly wouldn't be the basis for a standard mortgage of 200k, even though their property is worth about 350k and they own it outright. I certainly don't want them getting involved in some equity release scheme, and I only need their money for about 3 months as a sort of bridging loan whilst my own house sells. Are there any solutions to this conundrum? Thanks!

I am married to a banker, and she tells me that lending against security without supporting income is colloquially known as pawnbroking, and senior clearing bank managers frown on it.

In message , snipped-for-privacy@britcoms.org.uk writes

I assume you wish to buy at £400k

Sorry to keep asking questions.

Have you got a buyer for your existing home?

If not then you are in a very common situation but I would counsel you NOT to try and get open ended bridging loan, even if you could get one. They generally all end in tears.

There is more to lending money than mere security, there has to be a repayment method and sufficient income to cover the interest. Pledging more security isnt the answer and wont enable a lender to lend if the income etc., isnt right. You will need to pay about £2333.00 a month on interest alone in addition to what you are paying on your own mortgage and I can almost guarantee it will take longer to sell your house than you think.

Without details of your income and existing mortgage and loan commitments I cant help more except to re-iterate "dont go for open ended brodging unless your income(s) are sufficient to justify your existing mortgage and the total new loan". It will end in tears.

In message , Bystander writes

That right!

You speak blithely of these mythical "proper banks". When was the last time you spotted one of them? I rather doubt whether there are any left, since a proper bank ought to have well-trained staff.

Have you asked your bank for a bridging loan ?

or does 'sort of' mean something else is going on...

Coutts is still good.

Ahh, well, errr,,, I'm sure I saw one once quite recently, now let me think..................

Your right. I'm glad you are still learning form my posts after all these years.!

Set-up costs on a bridging loan are absolutely ridiculous, I looked into this some while back. I can see from the varied answers on this panel that the answer is basically 'no' however. Thanks to all though!

Your name is Brenda and I claim my £5.

Can anyone advise me if any UK mortgage provider will accept the deeds of my parents' home as collateral for a mortgage? I have about 200k and need another 200k in the short term (basically as a cheap bridging loan). My own bank the A&L doesn't accept guarantors in this way, can anybody suggest a bank that does? Thanks, Rob.

es: If I represented your parents, I would advice them not to do this (however good son you may be) as they may lose their home in circumstance well beyond their (and your) control......

But highly inefficient, or they were before they became part of RBS.

Yes. And Drummonds I understand although I have never had an account there.

Axel