Money Moral Dilemma: Should we be guarantor for our relative?

AnnieMcG

For my own children I am a guarantor but for someone else I could not afford the consequences if they defaulted on their payments.

However there is an alternative. My son is currently in privately owned student halls and for those unable to provide a UK based guarantor they recommend using Housing Hand.

Housing Hand is an International Guarantor Service who provides this service to all students who cannot provide a suitable or qualified UK guarantor. Housing Hand also specialises in dealing with international students who cannot provide a guarantor in the UK.

As a new user to this forum I am not allowed to post with links so just google Housing Hand and you will find it.

Alternatively they could pay for the landlord to take out Rent Guarantee and Legal Expenses Insurance that covers rent if tenants fall into arrears.

Hope this helps.

scousemouse

NO!
I went as guarantor for my daughter and partner who had been together for years but they split up and she came home. The partner continued to live there for a while and then left without telling me. Letters to the house obviously went unread and unpaid rent piled up. I ended up with a CCJ as no one told me what was going on. Situations change, people change, it's not worth the stress.

tallgirld

As I have no intention of potentially being responsible for other peoples debts I would NEVER be a guarantor for ANYONE!

AnotherJoe

TBagpuss wrote: »

Not all mature students are 'perpetual students'. In many cases they may well be far more committed than those going to university straight from school. In many cases they will have a much clearer idea of what they want, and as they are likely to have given up the security of an exisiting job they may well have done more research and have a more realistic idea of the financial implications of studying and the likely outcomes.
.

True but probably doesn't apply to someone who has let things get to a point where they have to ask a relative seemingly out of the blue as well and haven't arranged things such that they don't need a guarantor

Pyramid

NO, NO, NO.
My daughter has mental health problems but there was no help available from her mental health team to find her suitable accommodation on discharge from hospital. She had to find a private flat quickly and needed a guarantor to pay £2,000 to be held by the letting agent. My partner paid and I signed as guarantor. When her lease finished, she needed to move again and needed £500 as a deposit, which I gave to her. When I approached the letting agent for the return of the £2000, I discovered that my daughter had stopped paying the rent and the money had been used. The relationship with my daughter has broken down completely and we have no contact. This example may be an extreme example but I trusted my daughter, I had never had reason not to trust her. I realise that I was naive but be very careful before you act as guarantor for anyone - the consequences can be unforeseen and life changing.

Ebenezer_Screwj

This sounds extremely dodgy. I would never get involved with things like that, especially where relatives are concerned.

alittlemadam

Most definitely NO.


This is their decision and they should make every effort to ensure that they have enough money set aside to pay all the bills, food, rent, etc, so you decide to help them out and you loose your job you are responsible for not only your own situation but also theirs and they get off scot free.


Anyone contemplating doing this needs there head seeing to, family can sometimes be worse that friends.


If they really want to do this maybe they should be a part time course over a longer period and still work.

Dill

MSE_Nick wrote: »

This week's MoneySaver who wants advice asks...

A single relative of ours is starting a degree as a mature student, and has asked if we will act as guarantor for their rental property (since they'll no longer be employed). However we need to prioritise our own kids who will be starting university soon and asking the same of us.

I can see both sides. A landlord will want a guarantor if the prospective tenant has no regular or reliable income. However, I don't remember ever having to ask my family to be a guarantor for me when I was living in student digs.. perhaps things have changed in the last few years?

I would just point out that no you can't possibly be guarantor for him/her plus your own children, and suggest that they ask someone else. Another possibility might be for the student to pay the landlord a year's rent in advance. As a mature student they may have worked and managed to save enough to cover this?

pitry

Recently I was asked to be a guarantor for my sister in Italy (I live in the UK). I was also lending her money to move as something happened but I'm not going into details.
The standard contract over there is 5 years minimum, with huge penalties to the side that breaks it. I fell off my chair and asked if I could guarantee for 1 year only.
Luckily the owner of the property, not trusting in my sister's situation, asked to have a 1 year contract instead of the 5, which made my life easier.
Having said that, she is now in a much better financial situation and has even started setting money aside to give me back, which although it was agreed as a loan, I had never expected it back that quick.
So it all depends on how close you are to this person, what terms can be changed to limit the "damage" should they not be able to pay the rent and what legal document you can put down for it to safeguard yourself.
I have a financial and credit risk background and I wouldn't do it unless I had the money and was prepared to write them off for the person I am loaning them to.
I am sure this will be the last time I had to send her money, I truly believe she has now learned her lesson well!
Best of luck if you ever say yes to this!

Money_learner

Only be a guarantor for a fixed period and read the small print. I am currently guarantor for my ex wife who is engaged living with her partner for the last year but I'm still stuck with this. I cannot remortgage or move on with my life financially until this ends. So far she has paid her rent but in trouble if she doesn't!!