Guarantor Mortgage

Guarantor mortgages are mortgages that involve a third party that agrees to cover your payments in case you are unable to. A guarantor can be applied to any type of mortgage so, basically, any type of mortgage can be a guarantor mortgage.

The guarantor is usually a family member or a close friend that is willing to handle the financial strain of your mortgage should you become unable to honor payments. Just like you, the guarantor will have to prove his income and his financial history will have to be in accordance with the lender’s requirements.

A guarantor is not used only in cases where the lender specifically requires a guarantor but also in cases where you would like to opt for a mortgage that is beyond your official or declared means. A guarantor strengthens you case and raises the maximum amount that you can borrow.

If you wish to become a guarantor in order to help a friend or relative, be very careful before doing so. Inform yourself of all the possible implications as they differ from mortgage lender to mortgage lender. In addition to the possibility of having to pay another person’s mortgage installments a certain part of your income that is free of obligation may be blocked and impossible to count as income for a mortgage of your own.