Mortgage guarantor

fredwatt

Just found a thread in this forum that touched on this topic but lost it and can't quite remember the wording, but basically my question is to all mortgage specialists and advisers - when someone signs the form to act as a guarantor, are they treated almost as a mortgagee? What would happen if they then wanted to get a mortgage or a big loan in their own name, would their guarantor status show up?

Cheers.

Thrugelmir

You'll struggle to find a lender who would accept a guarantor.

holly_hobby

Yes, they are legally responsible for the mge upon your default, and as such are assessed as part of the underwriting process.

They must declare such status in any application they make themselves, and your lender would want confirmation that they have also sought independent legal advice, as to the legal responsibilities they would be accepting in acting as guarantor.

Lenders whom consider gtors, can also insist upon a charge on the gtors unencumbered property.

Acceptable guarantors (where applicable) are normally parents, immediate family - there are lenders about who still consider but you'll need a broker to assist.

Hope this helps

Holly

fredwatt

Thats really helpful, thanks. Does the gtor have their name put on the deeds or mortgage docs or anything like that?

holly_hobby

They are not the legal owner of the property no.

The lender will have their own documentation for them to complete.

They are not for poor credit historys or where the sought after mge is completely unaffordable.

Why do you want to source a gtor mge ?

Holly

fredwatt

Thanks again Holly, just doing some asking for a friend, seems these things come and go.

clippy_girl

i have a guarantor mortgage with cooperative bank, just applied direct, no broker req. my mum guaranteed my mortgage as i didnt earn quite enough when i bought (but wages were going to go up within a few years). i applied and gave them her details (obv she had given her permission!). they asked me loads of questions about all her existing commitments such as utility bills as well as current mortgages. we then both signed the paperwork. she had to send a letter to them signed by a solicitor stating they had advised her. i assume my mortgage shows up on her credit report as she is listed as linked to me on my report.

as stated above the guarantor will have to pay if you dont. therefore all coop were concerned about was could she pay for her own house and bills as well as all of mine. i got the impression they didnt really care too much about me!

my 3 year deal ends in nov so i will be getting a mortgage by myself then.

the coop still do these mortgages on their website if you are interested.

kingstreet

Basically, a guarantor is a joint applicant for the mortgage, but is not named in the ownership of the property.

If the guarantor later applies for a mortgage of their own, the guaranteed mortgage may affect their borrowing power for their own arrangements.

liteplay

@kingstreet: does the guarantor have to live in the UK?

kingstreet

I would be very surprised if a lender accepted a guarantor who was not in the UK.

somethingcorporate

With very little ability to enforce any guarantee overseas it would be a very foolish/risky bank that would take an overseas guarantor.