Mortgage approval with guarantor?

R

raybells

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Hi I recently applied for a mortgage of 180000, I have the 10% deposit, no loans and a permanent job. All was going ok until they came back looking for my father to go guarantor for 100k of it!! WTF?? I could never in a million years expect him to do that, am I right unthinking that would really go against him if he ever went to apply for a loan?
 
Who mentioned your father to the lender in the first place? It's odd that they would suddenly suggest that he go as guarantor unless he had been mentioned as part of the application. How did they know that your father wasn't dead / unemployed / estranged etc.?

It certainly has serious implications for your father.

If you don't qualify for the loan on your own income, perhaps you should consider holding off for a while until your financial circumstances improve?
 
I live n a small town and the woman in the bank knew my father and knew ha was a customer of the same bank. The annoying thing is that they told me first day that my income was sufficient for the mortgage, it's 42000 and the loan would be for 180000. I could understand being guarantor for 10 or 15 k but 100k seems off the wall!
 
I think it is more a case of reality hitting the banks! Generally lending someone more than about 2.5 or 3 times their salary is considered high risk and I'm not surprised that they are looking for someone to go guarantor on the loan.

By the same token, taken on such a loan, even if approved, is a very high risk undertaking. At those levels, even a small change in your circumstances or in the economy at large could easily lead to financial problems for both you and your father.
 
Thank you for the replies. Does anyone know what the implications of being guarantor are? Is it essentially like having a loan of that amount?
 
raybells said:
Thank you for the replies. Does anyone know what the implications of being guarantor are? Is it essentially like having a loan of that amount?
Click to expand...

If you fail to repay, regardless of the reason, they are on the hook for it. That is the whole point of having a guarantor!
 
I know that I mean if my father were to apply for a loan in the future does that 100k get in the way?
 
I imagine it would since it would go towards his ability to pay back his own loan as well...

Furthermore, don't be surprised if they expect your father to pledge assets as well, given the size of the loan.
 
Thanks Jim I'm just curious really as I have no intention of agreeing to it, they can keep their money!
 
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