The Mortgage Works pulls out of the guarantor mortgage market

by Aaron Strutt

Nov 04 2013

The Mortgage Works, the specialist broker lending arm of the Nationwide Building Society, has pulled out of the guarantor mortgage market.  This makes it even harder for parents to help their children get onto the property ladder without gifting them a cash deposit.

There are certainly not as many lenders offering guarantor mortgages as there used to be and it is getting harder for parents to use their salary to help their children buy a home.

There are still some guarantor mortgages available but they are not as flexible as The Mortgage Works' old rates. The specialist mortgage lenders previously offered both full and limited liability mortgages although the rates were not particularly cheap. Parents had the choice of how must responsibility for the mortgage they wanted to take on.

Mortgage lenders typically take the whole parents salary into consideration, rather than their child’s for a guarantor mortgage. This is the case with Virgin Money and The Co-operative.

Trinity Financial has access to Scottish Widows mortgages and they are offering a great option for borrowers requiring help from their parents to guarantee the mortgage. They will "top slice" the application so the parents income does not need to cover the whole mortgage. This would not happen if they applied to Virgin Money or The Co-operative Bank.

November 4, 2013