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Ordinarily a guarantor is there to carry the can if you default on the loan, as such is a considered undertaking. I am not sure it is used quite as much now, seeing as affordability criteria is generally applied and lenders are more responsible post 2008. It is usually sought by providers who offer it where the loanee is close to the affordability criteria, or subject to prior defaults. It is unlikely to increase your multiples in anyway, as by virtue of having a guarantor they require reassurance that the loan can be repaid. Although obviously different lenders will have slightly different attitudes to risk and price this accordingly. Also they will seek reassurance/check that the guarantor can repay in the event of a default.
With regards to additional borrowing on the property, a lot will depend on the mortgage provider, the LTV and if you have required a guarantor for the mortgage. Nationwide gave me a ‘further advance’ when I moved as they would not consolidate my borrowing, although they applied the affordability criteria to both loans.
Obviously a secured loan is different, expensive and probably best avoided, as with anything best to get professional advice and not that of a drunk!
~ Si
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Not many lenders at all doing guarantor mortgages at the moment.
You have several lenders doing joint mortgage sole proprietor mortgages, which is mainly to allow another person on the mortgage to add their income to the affordability, but keep them off the deeds, as this may incur stamp duty considerations.
You may also be referring to family deposit mortgages which some lenders did where the family would offer a charge over their home or savings/investments to offset a smaller (or 0%) offered by the children buying.
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Acliff
@bobble
Realise these are 2x questions for a mortgage broker but would really appreciate any bank holiday weekend advice please as can't chat to one...
Is a having a guarantor on your mortgage purely to help if you lack deposit or are struggling to get approved, or can you use them to borrow more than a multiple you have been offered (say 4.5x instead of 4x) offered to you?
If you get a further advance say 2 years into a 5 year fix, would you current lender offer you a similar rate and you'd have like a second mini monthly mortgage you'd renconile as one at the end of the 5 years? Or do they shaft you? Guessing can't go elsewhere for it by definition of a 'further advance'