How a guarantor-backed mortgage could help
After more than 10 years, the current Help to Buy scheme in England is coming to an end (it is set to continue in Wales, albeit in a different iteration).
Introduced in 2013 in an attempt to kick-start a sluggish housing market still struggling to recover from the effects of the financial crisis, the scheme went onto help in the purchase of more than 375,000 properties, of which 316,085 were bought by first time buyers.
Despite criticisms of the scheme, what can’t be denied is that it has helped many people take their first steps on the property ladder when ordinarily they wouldn’t have been able to during a decade which has seen house prices soar by more than 70% with the average house price shooting up from £167,716 in January 2013 to £289,818 at the end of January 2023.
Introducing guarantor-backed residential mortgages
So, with house prices at near record levels, where can first-time buyers turn to?
A guarantor-backed mortgage could be suitable for those looking to buy their first home, but who may not have a high enough income to qualify for a mortgage on their own. The guarantor is someone, usually an immediate family member, who agrees to cover mortgage repayments if the borrower can’t pay them for any reason.
The guarantor won’t own a share of the property and won’t appear on the deeds, but they will be liable for the repayments if the main applicant falls behind.
If you would like more information or have any questions about guarantor-backed mortgages, please contact us.