Should I be a guarantor for my sons mortgage?

NO NO NO Never be a guarantor for anybody!

I don't think you ought to be a guarantor but, if you can afford it, could you perhaps lend him some money? Would that assist him?

I haven't lent my adult children money to do with property purchases but I did lend one of them £2,000 once and it was paid back £200 a month and everything was fine. I lent another one of my AC £3,500 once and, again, it was paid back with no problems.

These are, I recognise, quite small sums compared with being a guarantor for someone's mortgage.

Being a guarantor is not an open ended commitment, you just need to really understand what you are commiting your self to - and it is the lender's responsibility to check you are financially able to handle the burden of repayment if it arises.

The usual thing is to run through the guarantor's financial situation to check that they can bear the cost should the principle default and only if they can, are they accepted as guarantor. The person offering to be a guarantor should also do their own homework and make sure they are not commiting to something they cannot meet, without selling their home or going bankrupt.

I am amazed that this father was allowed to act as guarantor as he clearly never had the financial resources to be able to complete his side of the agreement if things went wrong.

When DH offered to be the Guarantor for DDs mortgage, we ran through our own financial situation to make sure we could afford to take over her mortgage and pay any arrears if she did default and what we would do with the property then.

DH was then given a very thorough financial going over by the lender to check how we would cope if DD defaulted on her mortgage and only accepted DH as a guarantor when they could see we could sustain the loss in the case of default without any major problems.

Guaranteeing a loan is a financial arrangement that like any other financial arrangement should only be entered into if you understand fully what you are letting yourself into and know you can cope if everything goes pear shaped.

Too many people toss their common sense out of the window when they see a big return or are asked for a loan by a family member. In this case the house concerned wasn't even his son's home, it was a buy to let.

It is tragic when you see these cases on tv or hear them on the radio, but you need to ask yourself to what extent the victim is responsible for the mess they are in, because they frequently are.

Do ‘t Do it.
There was a recent TV prog where elderly Dad was guarantor for rental property where his son lived. Son defaulted. Agent had to call in debt from the guarantor. Elderly chap only had his pension. I’m fairly hard-hearted most of the time, but this elderly chap in tears in agents office, saying he could only pay £100 per month from his OAP to make up huge rent arrears from his son.....even I was in bits.
Help your family out with up front costs if you are able, but not as a guarantor as its such an open-ended commitment.

Yes, thanks for letting us know- you have made the correct decision as you have been informed by many!

Thank you for letting us know, Shinamae.

I hope they manage to find somewhere suitable within their price range.

Great advice thank you all so much,have definitely decided not to go ahead.....????

I would say no, no and no!
In 2019 my youngest son had just gone through a divorce. He then met a new woman within weeks and they went off on a lovely holiday.
About 6 weeks later he called to ask if I could loan him some money as he was having very temporary cash flow problems with his business. Also found out two days later that new partner had just discovered she was pregnant.
I thought it over for days then told him I couldn't do it as he has two other brothers and if they came to me with the same request I couldn't match it for them.
Now, none of us could have foreseen the pandemic, but if i had dipped into my savings to help him and he had delayed repaying, I wouldn't have survived this last year financially.
It's only been because I had a 'rainy day' fund that I've been able to get by.

Don’t do it unless you can afford to gift it. It would be better to gift him a small amount if you want to help. My mother was always scrupulously fair between myself and 3 siblings plus grandchildren irrespective of our earning/ house situation. This meant we were all happy with whatever came our way as we knew it was shared equally. Nothing like money to start a family rift . I have given both my girls a financial helping hand - a gift after my mother died that I could afford. We also lent eldest daughter 25 grand to help buy her first house which we were meant to get back in 1 year and waited 7 .... it caused all sorts of problems between her and her ds
and every time eldest spent money on something unnecessary we thought ‘that’s our hard earned cash!’ Not to be once bitten twice shy we then promised to loan the second daughter the value of her small terrace so she could move quickly ....thinking it would be a couple of months ... it dragged on for over 7 months and still no move - then eldest came crying and begging for the money to help her buy her dream home so after a lot of heartsearching and agreement from younger daughter we agreed . This was all money we had only just got from retirement in our lump sums after a lifetime of work! Our eldest seemed to think it was hers ........ she even asked if we would re mortgage our home to help ! We love her dearly but that was a step too far. Eldest daughters dream home has fallen through to much unhappiness all round and youngest is still stuck in her tiny terrace but at least we have our money and think it’s time to spend it on us! The moral of this story is don’t be as soft in the head as us ( we are very lucky to have resources but they have been hard earned and a long time in coming ) you never know where lending money or standing security will lead and the potential for problems are enormous and unpredictable. I repeat only give what you can afford to lose and can make fair between your children . And don’t ever think you can keep it hidden from the rest of the family! It’s a practical and emotional minefield . Don’t do it.

If he needs help with a deposit then perhaps release a small amount of equity from your home. You can now get a variety of products one of which would allow you to repay the interest monthly. Before you do anything, take advice from a qualified financial adviser.

I think you already know the answer. Never be a guarantor for anyone.....ever

Personally, I would say absolutely not! It could leave you exposed to having to pay out large amounts of money. Your son may have a good job at the moment but no one knows what might happen in the future for whatever reason. Hopefully things will always be good for you and your son, but please do not put yourself or your home at risk. Good luck.

sweetcakes

As he is a builder tell him to have a look at auctions you can get some great bargains to do up, and watch Homes under the hammer every morning on BBC 1, good luck to your son. I won't give you my 10 penny worth as you have decided not to do it ?

The problem with houses that need renovation is that it’s difficult to get a mortgage on a house in poor condition, another is having the time to do it. OK for a self employed builder not so good for an employee.

I feel sure your DS would not have liked to put you in that position anyway. He has a home and family and works hard and they have obviously agreed that it is better that she stays at home with the children. They have it all under control, you must try not to worry.

It sounds like you really want to do it. If he were an only child, and you were wealthy, maybe. What happens if a wheel falls off and then one of your other children really needs help? Can you manage all that? Is he married? She will be a co-owner, right? What about her parents? Are they helping?

sweetcakes

As he is a builder tell him to have a look at auctions you can get some great bargains to do up, and watch Homes under the hammer every morning on BBC 1, good luck to your son. I won't give you my 10 penny worth as you have decided not to do it ?

Thank you..?

Roseflower5

Tell your son to get another extra part/time job on weekends

Why would I do that? He works very hard all week.He knows nothing about this it was my idea and I have now decided against it...

Can only speak for what we did which was give our daughter the top up she needed to buy a house. She moved from a flat with no garden to a house with a garden with her two children and husband . Result one happy family and thats all that matters in the end. The Covid situation made us decide this was best as that hot summer with no garden was Hell for them and we thought what use is money in the Bank?

As he is a builder tell him to have a look at auctions you can get some great bargains to do up, and watch Homes under the hammer every morning on BBC 1, good luck to your son. I won't give you my 10 penny worth as you have decided not to do it ?

You only get into trouble if you cannot to pay the debt off from liquid assets, if there is a default. It is when people put their houses on the line or simply sign things without really understanding precisely what they are undertaking.

Nowadays lenders will not accept a guarantor unless they can show they can bear the burden of default without undue problems, and selling your house to pay the loan is an undue problem.

The biggest danger now is people guaranteeing debt repayment or business loan, where checks are less thorough and the seccurity much less.

My Mum’s wonderful friends stood guarantor for her when she was widowed (aged 32, 4 small children and living in a tied cottage). None of my father’s family would help her. Her friends had no such qualms and they never had to step in to help. They remained friends until they died in their 90’s. A few years ago my friend asked my advice when a young friend of hers asked her to stand guarantor. I only had my mum’s experience to go by and if it’s all done legally couldn’t see any reason not help. She has never had to pay his mortgage and is now released from it.

Definitely not. You cannot predict the future, and could very easily lose your own home. Your son must live according to his means.

No just no

Not a good idea - solicitors are not keen to do this any more.

We did this for our son for 18 months - but my husband was working at the time and our son did very well and weaned himself off as soon as he could.

Very risky - he should stick within his budget..

Sorry but I am another joining the "no" brigade for all of the reasons given. It is a very kind thought but one does not know what is around the corner and you could be homeless.