Should I be a guarantor for my sons mortgage?

As guarantor you are giving an undertaking you will be liable for any debt your DS incurs in relation to the mortgage. Eg he misses payments, you will be liable. Your own property will be used as security to ensure you will pay for any default by your son therefore the mortgage lender will place a Charge on your property to ensure you cannot sell it without paying off son's debt. Maybe your DS should look for somewhere cheaper

There are three things you really must consider, here:

Is he your only child? If so, perhaps you can stand guarantor, if not, you really mustn't unless you are so improbably rich that you can do the same for your other children.

Point two, if he cannot keep up his mortgage payments, can you do so, without having to sell your own home?

What happens if you want or need to sell your house, while he has a mortgage, you stood guarantor for, on his?

Run these three points past a solicitor before offering your son help and look into whether your present will covers all the ramifications of this kind of help, too.

There are quite a few First Home schemes out there. My daughter is disabled with a husband on low income and with the new Mortgage Benefit rules, she had to put the equity on her home into a part buy part rent scheme. That might be a better route for your son because he could buy more of the properly as his income went up and he could get a bigger mortgage or sell when he has built up some equity to go it alone.
There are just too many problems that could arise with guaranteeing mortgages for your children. Even buying jointly can end in tears. In terms of you lending money, the bank will consider that as a repayable debt and reduce his mortgage advance so unless you can afford to gift the money, you might not be as helpful as you think. Your son would only have to get Long Covid, slip a disc or break something and his income would really suffer. Do think very carefully.

No, no, no, no and once again, no.

Some life lessons are better learnt than taught. I'm glad you have reached your decision. If thats his budget he can work within that. Its not the price of your house that makes a home.

I have decided not to do it as I really could not afford to take over his mortgage. I don’t suppose I really thought it through, just a knee-jerk reaction to try and help but all your advice has really helped me reach a decision and my son knows nothing about this so he’s not going to be disappointed anyway...??

One way is to take equity release to the future value of our son's one third share of your home when you snuff it. He will need to sign a legal form (for the protection of his siblings) to say that he understands that he is receiving this money now an dis OK with paying the interest o the Equity Release as well - albeit in years to come. It's a bit double edged though - the longer you live , the more he will have to pay in interest. Too bad - if he needs help now rathe than when you die off, ER is one solution. do shop around though and do take advice on which company to go with and do read the small print !!
Or yes, you could just stand guarantor for his mortgage if you are sure you could afford that mortgage without having to sell your on home. Only you can do that sum. always look on the WORST side of what food go wrong and what it could cost you. Then do it and forget it. Job done. All safe an all happy. If you can't afford to pay his mortgage then don't say yes !

Sorry but I wouldn't do it. Is there definitely nowhere else in his price range or if you maybe have a bit of extra savings stashed away to help with deposit, but please don't out your own home at risk.

I'm sure someone will have already suggested this but can't you just chuck in the extra? If £245k isn't enough, tip in the extra £10k or whatever is needed. A loan or a little mortgage on your own house would be much less of a risk to you.

NO NO NO, don't do it unless you can afford to be made homeless if it all goes pearshaped. Sadly I have seen this too often with friends

Such a lovely, kind and generous gesture and thought BUT absolutely no !!

I helped my son by taking on a small mortgage in my name (against my property) to get the amount he needed. Interest only for couple of years (very low rate). He pays me the monthly sum. The idea being as his flat appreciates and his salary increases he will be able to increase his own mortgage and take the debt off me. Just a delaying tactic really but I felt good being able to help out.

I was going to suggest you give him a loan/ deposit even, but it's already been said. Mine was a different set of circumstances where I sold a property and handed over house deposits for each daughter as much as to say " that's all you're getting ", in other words it wasn't returnable and would have been in my Will anyway so better at the time until waiting for me to die.

My D still lives in the same house with not long left to pay until it's hers before she retires.

Definitely don’t do it !
A load of reasons but some are other siblings may feel resentful they weren’t helped. Huge concerns about your home loss if defaults.WhT if for some reason he can’t work you will be liable for it all. Should his relationship dissolve and issues with separating assets. Your peace of mind , I know I would loose sleep taking on such a debt , which is what you are doing in essence.You prob won’t be able to get any other credit should you need it.The list goes on and on !

Only do it if you are able to pay the mortgage if he is unable or happy to sell your home at some point if necessary.

Another for Team Don't Do It. Many good reasons listed above.

BlueBelle

If that’s the normal price in his area he needs to look at another area you can get practically get a small hotel for that price in my area I m not making light of it but that might be his answer

Blimey - where do you live? Round here you can't get a one room studio flat for that!

Point taken, and I shall heed the advice from my fellow gransnetters...many thanks...
??

My Father's sage advice was that you should only gamble, invest in stocks and shares or loan money if you were able to lose all the money and not have repercussions, either financial or emotional. If you can help your son, acknowledging that you could be in a postition where you are paying his mortgage for months or even years without any real detriment to yourself, then why not? What is more precious than helping those we love? I have given one of my AC a large sum to help with the housing ladder, and seeing the happiness that a decent, bigger home has brought is more rewarding than anything I can remember in my whole life. If I had hung on to the money my AC would have had it after I was dead - I wouldn't have seen the difference it made, and it would likely be too late to do the same amount of good for the GC.

I had neighbours long ago who were guarantors of their daughter's mortgage. They had to sell their home. So I go along with the advice already given here and hope your son finds his own way to be able to buy.

Thanks all for the advice......

Whiff

Your son is an adult . Therefore he is capable of making his own decisions. He needs to stand on his own to feet. Also how do you know in a few years he wouldn't turn his back on you. Don't think it can't happen. It did to me last year.

My children won't accept help towards their weddings and both brought their own houses all due to their hard work and saving. Which I very proud of.

If your son wants a more expensive house he needs to save and work for it .

You could lose your home.

My son works hard and I am very proud of him, this is not something he has asked me to do it is something that I thought I would offer to do... he knows nothing about this at all..

No one should ever offer to be guarantor if they cannot afford to repay the debt if the borrower defaults.

We were asked to act as guarantor for DD because she was a student when she bought her flat; she had a small inheritance for the deposit and was relying on letting the second bedroom to pay the mortgage. We had very carefully done our calculations and could afford to buy her out and rent it out if she defaulted. But she didn't, but careful calculations about our financial situation if she did, were very carefully calculated before we signed any documents.

I do not think the OP is any position to risk it - and she would probably be turned down by any lender.

I've just seen your post Shinamae, I am sorry but I agree with those saying don't do it. In the late 80's my late husband's friend married into a huge Greek family, and he was persuaded to act as guarantor for one of the family. He turned up at our house one night white as a sheet, he'd been summonsed for the £20K debt, the family member had defaulted and they were calling the whole loan in. We didn't see him again for about ten years, just bumped into him at Euston of all places, and he had had to sell his house to pay the debt, and ended up divorcing his wife over the stress of it all.

The problem is that your property will need to be valued and your income will be taken into account if you are a guarantor, the costs are quite high. If you are retired or only work a few hours you won’t have enough income to pay the mortgage if he can’t, the mortgage company will probably say no.

Giving him cash towards the loan is the best way you can help. This may be a case where Equity Release on your house is justified, you should take professional advice before you do that, and also consider the affect on your other children, if any.