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
The government has announced plans to make buying or selling a home cheaper and quicker with what is being called the “biggest shake-up to the homebuying system in this country’s history.”
More borrowers using equity release
20 days ago
Almost one in five equity release mortgages are now taken out to provide financial support to family.
Buyers purchasing properties sooner
22 days ago
According to industry data, the expected wait for those looking to buy a property has dropped from just over 11 months to less than six months.
It is common for your first mortgage payment to be higher than your subsequent monthly payments for two reasons.
What to do just before you get your keys
27 days ago
Firstly, a big congratulations, you’ve now exchanged contracts! After weeks and months of waiting, you are about to move in. What should you do first?
The chancellor will deliver her second budget this autumn. Due to slow economic growth and high inflation, the government need to manage a £40 billion shortfall in public finances. There have already been reports about changes to taxes including income tax and capital gains tax.
Landlords could face a new tax this autumn
29 Aug 2025
The chancellor has advised that landlords could have another tax to pay this autumn as the Treasury decide whether to extend national insurance contributions to rental income.
According to a report in the Guardian, senior ministers have asked Treasury officials to look into a “proportional” property tax to see how it would work as an alternative to the existing stamp duty land tax on owner-occupied homes.
More information
Trusted by
