Guaranteeing a mortgage

S

sarahj

Registered User
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Can anyone advise if they have had their mortgage guaranteed by a parent and what was involved. thx
 
relatively straightforward i imagine - the parent has to be able to prove they can make good any default on your part, this may involve them showing their current worth, salary, savings, property wealth etc. In addition there may be a requirement for the guarantor to take out life assurance which may require a medical. (this may no longer be required), as always, Sarah knows best!
 
Thanks Glenbhoy! Guarantors are almost always family members - parents guaranteeing their children's mortgage due to a shortfall in income on the child's part or children guaranteeing a mortgage for an elderly parent. It has nothing to do with the guarantor's assets as the property being bought is seen as adequate security. What lenders are looking for is sufficient income to cover all or part of the mortgage; taking into account any debts that the guarantor themselves may have. Some lenders prefer the 'guarantor' to actually be a joint borrower (but not on the title deeds to preserve the child's FTB status) which means effectively the parent is responsible for the full mortgage on a house they do not own.

Each application is viewed on a case by case basis but most lenders require a minimum income for the guarantor of circa €40,000. Life cover is not normally requested unless there is a big shortfall in the child's income.

Sarah

www.rea.ie
 
Can parents guarantee a mortgage for their child and his partner? Or can they only guarantee a mortgage for a single person?
 
Yes - as long as there is some family connection between the guarantor and one of the borrowers however I would advise all parties to get legal advice in this scenario.

Sarah

www.rea.ie
 
Quick question.

Myself and GF are looking at buying a house this year. We're both on good incomes, have money saved and as far as I'm aware no bad credit history (well, not too bad I hope). Anyway, on the question of guarantor, my parents are retired on a very modest income and are quite elderly. Where does this actually put me in guarantoring a mortgage as I've heard that if parents are over 70 they can't go guarantor. I suspect I'm in limbo land.

Jake
 
Banks only resort to guarantors when they have to, if your incomes are good, there should'nt be a problem.
 
thanks for all the replies. The mortgage we're looking for is probably going to be a bit above what the bank would approve us for on our own (probably) so we may need to go down this line.
 
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