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Mortgage guarantor
SquashedPlum
Posts: 1 Newbie
I just wondered if somebody could please give me some advice regarding being a mortgage guarantor.
My daughter has asked me to be a guarantor for a mortgage that she wants to take out. I am not too concerned, because I believe that she will easily be able to cover the payments, but her work situation just makes it difficult to get credit at the moment.
I haven't decided yet, but I wanted to get some clarification on what it really means to be a guarantor.
If, for some reason, my daughter could no longer make the mortgage payments, I assume that I would be responsible for making them instead.
What I am not clear on is the effect that this would have on ownership of the property.
Is it the case that, if she never made payments, I would have to keep making them, until such time that the mortgage was paid off, and then she would own the house.
If I also stopped making payments, I assume the bank would foreclose on the house. If there was negative equity, would I be liable for that.
I don't think any of the above would happen, but I'd just like to understand exactly how this.
Any advice would be greatly appreciated.
My daughter has asked me to be a guarantor for a mortgage that she wants to take out. I am not too concerned, because I believe that she will easily be able to cover the payments, but her work situation just makes it difficult to get credit at the moment.
I haven't decided yet, but I wanted to get some clarification on what it really means to be a guarantor.
If, for some reason, my daughter could no longer make the mortgage payments, I assume that I would be responsible for making them instead.
What I am not clear on is the effect that this would have on ownership of the property.
Is it the case that, if she never made payments, I would have to keep making them, until such time that the mortgage was paid off, and then she would own the house.
If I also stopped making payments, I assume the bank would foreclose on the house. If there was negative equity, would I be liable for that.
I don't think any of the above would happen, but I'd just like to understand exactly how this.
Any advice would be greatly appreciated.
0
Comments
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Yes.Is it the case that, if she never made payments, I would have to keep making them, until such time that the mortgage was paid off, and then she would own the house.
They might choose to sue you for the money rather than repossess - especially if there was negative equity. If you have other savings/property they could sue for that. And yes, you would remain liable for debts if there was negative equity.If I also stopped making payments, I assume the bank would foreclose on the house. If there was negative equity, would I be liable for that.
Also consider other future possibilities. Daughter gets married in 5 years. 6 years later - messy divorce. Husband claims rights to property. Mortgage default. You pay mortgage and husband lives in bliss.
Get some legal advice on all this.0 -
DONT DO IT... search on here about people who have lent to family...its heartbreaking..It is nice to see the value of your house going up'' Why ?
Unless you are planning to sell up and not live anywhere, I can;t see the advantage.
If you are planning to upsize the new house will cost more.
If you are planning to downsize your new house will cost more than it should
If you are trying to buy your first house its almost impossible.0
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