Guarantor reversed.

Gazza1964

Hi,

I know it is possible in some circumstances for a parent to act as guarantor for a mortgage - is it possible to do thids the other way round ?

Could I act as a guarantor for my parents if they mortgage their property -

Thanks.

maninthestreet

Yes, but why would you want to do this?

Gazza1964

Hi,

This would give my parents some extra funds in their retirement and their property is the only asset they have -

Robert_Sterling_3

Do your parents own their house outright i.e with no mortgage at all?

How old are your parents?

CLAPTON

Can your parents afford to repay the mortgage?

Robert_Sterling_3

It looks as if they will use the mortgage money to repay the mortgage :eek:

Gazza1964

Hi,

Yes the property is unencumbered.

No my parents will not be able to pay the mortgage - I would be paying it for them.

I was thinking along the lines of 50K interest only - they are both 70.

perhaps 50k is a little high - more like 40k - over 20 years - first 10 on a fixed rate

Robert_Sterling_3

Originally Building Societies were formed so that they could lend people money to buy a house..

Your parents want to borrow money which they cannot themselves afford to repay so that can have money to spend. OK.

You hope to get them a £50,000 mortgage on their house for which you will be the Guarantor

I am not optimistic that you will be able to arrange such a mortgage. Mortgages often have to be repaid by the time the borrower reaches 65 years of age.

They could go for an Equity Release Plan.

paulfaz

But they could lose their home if you can't pay the mortgage. Why don't they equity release, downsize or work part time?

You shouldn't be relying on your offspring in retirement surely?

Comyface

I agree you could have problems doing it this way.

I know some lenders view guarantors as a short term solution, eg. borrower would be able to support the mortgage in the future (guaranteed pay scale etc) but short on income at the moment. If your parents are unlikely to be able to ever afford their own debt (as a mortgage company would see it), then they probably wouldn't allow the lending, guarantor or not.

Gazza1964

Thanks for all your replies.

Paulfaz. My parents are not relying on me - I want to help them have a more enjoyable retirement and unfortunately equity release is not an option.

I am one of five children - and the only one in a position to help - isn't it natural for me to want to do that when I have seen all they have done for us.

I guess this is a no go and I will have to look and see what aternatives there are ..

Thanks again.