A guarantor helps with affordability, not your credit file.
This is the one people get wrong most often. If you were declined because of something on your credit file, bringing in a parent usually does not change that answer — because the lender still assesses you. Worth knowing before another application.
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David Bourne
Two completely different problems
Most declines come down to one of two things, and family help only answers one of them.
An affordability problem sounds like: "we would lend, but not that much." Your income does not stretch to the amount you need. This is what a guarantor, or a family member joining the application, is designed to solve.
An adverse credit problem sounds like: "not with that on the file." A default, a CCJ, a run of missed payments, a debt arrangement. A guarantor does not remove this. You remain an applicant, your file is still searched, and the lender still applies its rules to you.
People who were declined for the second reason often spend weeks persuading a parent to help, then apply again and get the same answer — with another search on the file. If you are not certain which of the two you were declined for, that is worth establishing before anything else. It is usually a five-minute conversation.
The arrangements families actually use
A guarantor promises to cover the payments if you cannot. They generally do not own the property and are not on the deeds, but they are committed to the debt.
Joint borrower, sole proprietor puts a family member on the mortgage while leaving them off the ownership. Their income is counted, and because they do not own a share, it can avoid the additional stamp duty — or its Welsh and Scottish equivalents — that comes with owning a second property. It is the arrangement many lenders now offer instead of a traditional guarantor mortgage.
Deposit-backed or savings-backed schemes have a family member place savings with the lender as security for a period, rather than take on the payments.
Which of these are open to someone with adverse credit is a narrower list than the general picture, and it varies by lender and by how old the credit issue is.
What the family member is really agreeing to
This is the part that often goes unsaid, because it happens between people who love each other and nobody wants to sound reluctant.
- It is a real, binding commitment, frequently for years, not a gesture of support.
- It can affect their own borrowing. The commitment can show when they come to remortgage or borrow themselves.
- If payments are missed, it reaches them — their credit file, their savings, and in some arrangements their home.
- Getting out of it is not simple. Release usually means the borrower qualifying alone, which may be years away.
I would rather have that conversation with both of you in it, so nobody signs something they have not fully understood. If the honest conclusion is that the family member should not do this, that is a legitimate outcome and I will say so.
If the problem really is your credit file
Then the routes are different ones: a lender whose rules fit your circumstances, or waiting for something to age off the file and applying from a stronger position. Sometimes a few months of patience changes the answer far more than a guarantor ever could.
What people ask about guarantors
Will a guarantor get me approved despite a CCJ?
Usually not on its own. A guarantor addresses how much you can borrow, not what is on your file — you are still assessed.
Does my parent have to own part of the house?
Not under joint borrower sole proprietor, which is why it is often preferred — it can also avoid the extra stamp duty of them owning a second property.
Does it affect their own mortgage?
It can. The commitment may be taken into account when they next borrow or remortgage.
Can they come off later?
Generally only once you qualify on your own, which means a new application and no guarantee of the timing.
How do I know which problem I have?
Ask the lender for the reason, or tell me what happened and roughly what is on your file. It is usually clear quickly, and it decides everything else.
Find out whether a guarantor would actually change the answer.
Who else is part of this?
Income that arrives in an awkward shape, or a second name on the application, changes which lenders will look.
Buying together when one of you has something on their file
What a joint application really means, and the three routes open to you.
Self-employed with adverse credit
Two difficulties at once, and a smaller group of lenders comfortable with both.
Company director mortgages
Paid the tax-efficient way, and the affordability model cannot see most of it.