When you take a mortgage you are undertaking to pay the interest and/or capital back to the lender (mortgagee) in accordance with pre-agreed terms and conditions. Of course, many of the terms and conditions are ‘standard’ and set out by the mortgagee in the mortgage agreement. The interest rate payable and the repayment schedule will be set with reference to the applicant’s age, income and credit rating, to name just a few of the primary criteria.
Of course, sometimes a purchaser might not be able to fulfill all the lending criteria set out by the lender. In such instances, a close member of the family, might be willing to stand alongside the borrower and effectively underwrite the borrower’s liabilities under the loan agreement.
Offering to be a Guarantor on a mortgage agreement should not be entered into lightly. If the borrower defaults in their payments or otherwise breaches the terms of the mortgage agreement, the lender will soon be looking to the Guarantor to step in and take over the obligations in accordance with the Guarantee Agreement.
We would always recommend all parties take legal advice before entering into such an agreement.
Most Guarantors are parents of young people, stretching themselves in order to buy a home early in their careers. It is perhaps wise for both parties to fully consider the impact on their personal relationship such an agreement might have should the mortgagor (another name for the borrower) suddenly find themselves unexpectedly out of work through illness or redundancy.
Contact us to find out more about how we can help you secure loan terms that best suit your personal circumstances.
Download our Free First Time Buyers Guide
Recent posts
With the stamp duty relief ending in England and Northern Ireland, we have listed the top 10 cheapest areas for first-time buyers as published by Rightmove.
Are you looking to purchase your first home but unsure where to begin? Here are some tips to get you started.
Choosing which fixed rate to go for has been a dilemma for many of our clients so far this year. There really isn’t a right or wrong answer, but below we will look into the pros and cons of a two-year and five-year to help you make the right decision for you.
Best UK Mortgage Rates this Week
15 days ago
Here are the lowest fixed mortgage rates of the week, available to first-time buyers, home movers, buy-to-let, and those remortgaging.
Call us for more information: 01628 507477 or email: team@mortgagerequired.com.
Stamp Duty Rush as Deadline Looms
16 days ago
According to Rightmove, a whopping 500,000 UK homebuyers are rushing to finalise their home purchase before the new Stamp Duty rules change in April.
The UK government is introducing new rules for Energy Performance Certificates (EPCs) that will impact landlords. Here's a summary of the key changes
Should I buy or rent in 2025?
23 days ago
Choosing to buy a house is one of the biggest decisions you are likely to make in your lifetime. There are many factors that influence a house purchase, these include: finances, housing market conditions, and mortgage rates.
ISAs: what are they, and which one is for me
26 days ago
Since being launched back in 1999 Individual Saving Accounts (ISAs) have been very popular for those wanting to put money into savings. There are four types of ISA, and the majority allow flexible saving and the ability to withdraw funds easily. There are financial penalties on certain products, these usually pay the most interest.
More information
Trusted by
