What is a mortgage guarantor?
A product designed to help people who are not able to secure a mortgage on their own
An additional person is needed who can take responsibility for the deal
A guarantor is required to represent for those who do not have an income, or have a poor credit history
A family member or friend can act as a guarantor their role is to agree to cover any missed payments that may occur.
A guarantor although taking responsibility for missed payments will not own a share of the property, or be named on the property deed
A guarantor is financial security for the mortgage lender
A guarantor will often put their own house up for collateral, or pay a lump sum into a savings account until an agreed amount of the mortgage has been paid
Most lenders prefer close family to stand guarantor rather than friends
A guarantor needs to own their own property, or have a good amount of money to show they can cover any repayments required, and need a strong credit record
A lender should also always ensure that the guarantor has sort legal advice before entering the deal
Having a guarantor can give you more options dependant of their equity status. A lender may offer a 100% mortgage for instance, that allows you to borrow the full value of the property without a deposit