How much am I risking with a guarantor mortgage agreement?
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Written on: 12.11.2009 [01:14]
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Ann
Ann
Topic creator
Posts: 2
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My son and his girlfriend are planning to move into a new property before Christmas. They've found a place for 200,000 but are only eligible to borrow 120,000 and their estate agent suggested a guarantor mortgage (with me as guarantor!). How risky would this be for me? |
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Written on: 14.11.2009 [21:44]
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Summer
Summer
Posts: 5
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The risk involved will depend on how secure your son's situation is, and that of his girlfriend if her financial input is a deciding factor in their ability to meet mortgage repayments. Even if they are really committed to one another at the moment, it may be a good idea to get them to sign a contract which states that they are both responsible for the repayments, or which details specific buy-out deals etc... Sorry to put the damper on their relationship but nothing is set in stone and it's important that you're not left holding the pieces! If your son has a steady job, a steady income and a plan for making the repayments, you may be able to consider being his guarantor. Make sure they have some kind of repayment insurance in place too – this will kick in if there's a sudden problem with their finances and give them a chance to sort it out: it also prevents you having to take over repayments immediately. |
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