Guaranteeing A Mortgage

What is a guarantor?

A guarantor is someone who is put on the mortgage with you who is not responsible for making the monthly payments, which you are. However, if you fail to make those mortgage payments, the guarantor will guarantee that they will pay them back.

Who can be a guarantor?

A guarantor can be anyone who can prove that they can afford to pay back a mortgage if you stop paying it back. Generally it tends to be a member of family – for example, a parent – or a close friend who is willing to sign up to a person's mortgage and say that if they don't pay it back the guarantor will be responsible for it.

Is it a good idea to act as guarantor on a friend's mortgage?

It's only a good idea to act as a guarantor on a friend's mortgage if you know that friend really well and you trust them. To be a friend's guarantor, you must feel that they will pay the money back, because if they don't, you'll be responsible for it. What you may also find is that if you do act as a guarantor, you might find it harder to borrow money yourself, because when you go to a mortgage lender, they will look at your responsibilities, and one of those responsibilities will be the possibility that your friend may not pay their mortgage.

Should I act as a guarantor on my child's mortgage?

Acting as a guarantor on a child's mortgage can help if they can't afford to buy their own home, but they feel they can meet the monthly payments. Perhaps they don't have a large enough deposit, or perhaps the lender won't lend them quite enough money. If you do act as a guarantor on your child's mortgage, if they don't pay it back, you will have to be responsible for it. You may find it harder to borrow extra money in the future, because any lenders will take into account money that you're responsible for, including the possibility your child may stop paying back their mortgage.