student halls guarantor affecting mortgage application

Megloujesmik

My daughter is starting uni in Sept and has got halls sorted. We have been asked to be guarantors (deposit has already been paid in advance). We are trying to get a mortgage and we have been told that the fact we are guarantors for our daughter, will affect our capacity to get a mortgage. Is this correct?

tacpot12

I would expect so. If your daughter is unable to pay her rent at any time, you will have to pay it, and hence it will be taken into account in terms of what you can afford to pay on the mortgage. It is not uncommon for youngsters to have to leave their course for some reason or other, which means that they loose their grant and cannot pay their rent for the full year. University finances means that they depend on the income and hence have tenancy agreements that make the student and any guarantors liable for the full year's rent. It does seem a little unfair as the period when you would be paying rent under the guarantee would be six months on average. 

You might talk to the mortgage company to see they would accept an assertion that have cash to cover all your guarantee responsibility to not take this responsibility into account when assessing your ability to pay the mortgage. This cash might come from your deposit if you can still get the mortgage deal with a slightly lower deposit. There should be nothing stopping you from paying this amount off the mortgage when your daughter leaves university. 

The best thing you can do is avoid becoming guarantors, but I don't think you will be able to unless your daughter has a rich uncle or aunt who is prepared to step into the role of guarantor!   

dimbo61

Sorry who has told you that ?
Is it a question on the mortgage application form ?
We paid for our son's accommodation in halls of residence in advance and got a 5% discount and our son paid us back over the year.