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.
Data shows landlords could miss out on green mortgages due to expired energy performance certificates.
Buying a house is a big deal, and where you are planning to buy will make a difference financially. In this short blog, we look at the most affordable and most expensive areas and how much you need to be earning to buy in there.
10 days ago
Equity release is a type of mortgage that allows homeowners 55 and over to access money from their property's equity without having to leave their home. This is done by securing a loan against the house which is usually repaid by selling the property when the borrower passes away or has to move into long-term care.
11 days ago
It’s important to ask questions about the property you are interested in before taking that step to make an offer. A little probing can make all the difference between buying your dream house or something that requires a lot of work.
14 days ago
There are millions of homeowners over the age of 60 who are likely to release money from their homes to pay for their lifestyle during retirement giving those who are 'asset rich but cash poor' a way to live out their retirement the way they wish.
21 days ago
The average age of a first-time buyer in the UK is two years older than 10 years ago. This is understandable with managing the cost-of-living and challenges within the economy such as high interest rates making it difficult to get onto the property ladder.
23 days ago
Skipton Building Society launches ‘Delayed Start’ mortgage meaning first time buyers won’t be required to make repayments for the first three months.
According to a survey by Skipton, first time buyers who bought their home in the last five years found that in the first three months of living there, they were spending upwards of £30,000.
28 days ago
If you have recently moved into a property with a garden that requires a little TLC, or you’d like to get on top of your current green space, check out our tips.