First-Time Buyer with a Parent Acting as Guarantor
£235,000 · 35 years · 4.95% fixed 5 yrs. A 25-year-old first-time buyer in London wanted to purchase but her income alone would not support the mortgage required for properties in her area.
The Client
25-year-old first-time buyer
The Challenge
A 25-year-old first-time buyer in London wanted to purchase but her income alone would not support the mortgage required for properties in her area. Her parents were willing to act as guarantors but did not want to be joint owners - they wanted to help their daughter buy without having a stake in the property or taking on SDLT liability as second property owners.
Our Solution
Doulton identified a guarantor mortgage product allowing the parents to guarantee the mortgage without being on the title or the mortgage as named borrowers. The parents' income was assessed alongside the daughter's to support affordability. The parents' own residential mortgage was reviewed to ensure they had sufficient capacity.
The Outcome
Daughter purchased her first home with guarantor support. Parents are not on the title and have not triggered any SDLT surcharge. The guarantor arrangement is expected to be released in five years once the daughter's income has grown sufficiently. Key highlights: Guarantor mortgage - parents not on title, no SDLT surcharge; Parents' income supported affordability without ownership; Guarantor release planned in 5 years as daughter's income grows.