Mortgage guarantor

I have been in the position your daughter is in, OP, and while it is very stressful and frightening, she DOES have a place to go if she needs to (with you). I didn't have this. So there is no fear of being homeless although obviously, losing the family home is sad. Almost inevitable after divorce, unfortunately.

Your DD is lashing out at you due to panic and worry and fear of her future, she will calm down in time. Maybe offer her help to downsize, look for an affordable home? As most on here have said, the risks are huge; apart from the fragility of the job market, what would happen if she remarried? At the very least there would be considerable fees involved in unpicking the guarantor mortgage. Offer your DD help in moving forward and getting her and your GC's lives sorted and settled, but this cannot be at the expense of your peace of mind, your retirement.

Dear Jaffacake, please take heart and stick with your decision. I have some sympathy with your daughters position as 25 years ago I was in the same place. I was taken aback when my parents declined to be a guarantor. Maybe because I was so desperate I was clutching at straws. I knew I would never be homeless as I could move in with them,although not ideal. Instead they provided childcare so I could work part time and helped me out financially bless them.
A decade ago a very good friend asked me to be her guarantor for a second mortgage. She was genuinely shocked when I refused. Although a hard worker she was impulsive with money. I calmly explained that although I sympathised with her predicament I had fought to hard to keep my home to risk losing it. We are still friends. A year later due to some self made disaster her home was repossessed. Terrifying to think what the consequences could have been. Many of us are struggling at the moment and the threat of falling out with your daughter must be unbearable. Please please dont act as Guarantor,even to appease her. Sending hugs.

Loosing the family home is a big deal and your daughter is very upset but she has to bite the bullet and move into a place that she can afford, even if that means social housing. Depending on how long she has owned the existing house there may be little or no equity left, the house market has been very slow in most areas in the past 5 yrs. Private renting in most areas anywhere decent is going to be almost as costly as a mortgage.
If they do move in with you it may be more difficult to get social housing, if that is going to be the likely solution, there will be enough time to achieve an orderly move.

The problem being a guarantor is that it’s “open ended” if the mortgage payments are not paid and the house is repossessed the lender will come back to you for any loss and for any expenses. The only situation where you would do that is when you can afford to pay the pay the mortgage yourself to keep the house

Jaffacake Sometimes children are killed with kindness. If you have always been around to bale your daughter out, protect her from the results of her own bad decisions and generally always been there to sort it out when anything goes wrong, then her definition of whether you love and care for her is defined by how much you give and do for her.

Now something has arisen where you have no alternative to saying no, she is so shocked by this she sees it as rejection and a lack of love.

I think you need to think about how to ween your daughter off seeing you as a solution to every problem; childcare, debt, housing. I am not suggesting you just turn your back on her, but just occasionally say you cannot provide childcare, cannot do this small thing, or that, until she realises that she needs to grow up, be independent and sort out her own problems.

Yes, all of us help our children when we can but we all need to know when not to help them. It have to be cruel to be kind.

As your daughter starts to take responsibility for her own life, and that of her children, she will begin to appreciate how much you have done for her.

In the meanwhile, you should point out to her that you would be unlikely to be acceptable to a lender as a guarantor anyway as your income is not sufficient and all your capital is in your house.

Bless you, it must be so hard. I think her reaction just confirms you made the right decision. I know she’s your daughter, and you love her dearly,but she’s not showing you same respect, probably because she’s just worried. She has to learn though, you can’t throw good money after bad, and you’ve been so generous in offering a home with you.
People often get angry when they know they’re in the wrong. It’s frustration with themselves. I’m sure she does love you, and when she’s calmed down, she’ll see things more clearly. You’re right in your decision. You could have had loads of problems later on with this, and worst possible scenario...lost your house.

She’s, disappointed and worried, so I hope this is just a knee jerk reaction and that she’ll calm down.

You’ve made the only decision you could make in the circumstances. If she continues to behave this way then that only confirms that your decision has been the right one, I’m afraid.

I am sorry you are do sad, Jaffa.
I don't have anything to offer except keep saying you would have her move in with you until she's on her feet again.

Thinking of you.

Your daughter is being beyond selfish and quite frankly mortgage lending is so tight with restrictions at the moment you probably would not be able to do it anyway
I would not do it for my children even though we have our own house and my husband has his own Company as an independent mortgage Broker

So upset at response of my daughter to me saying I will not be a guarantor for her mortgage. Since then she has told me that I am such a negative person and harsh and brutal in my actions. Really don't know how this is going to end.
I have always supported her with help looking after the children especially when their father walked out on them when they were both under 3 years old. It is so hard to feel that you have not been loved or appreciated.
I am in a very dark place now. I have been shielding since the pandemic and having contact with her and the little one in my support bubble has been the only light for me. I am not sure if I can have the vaccine due to anaphylactic shocks to drugs and foods. Sadly it no longer seems that important as my heart has been broken by my daughters reactions to me.
Don't know how to carry on.

I have only ever lent to my children, not enormous amounts, just sorting out overdraft problems when they were students, and they both repaid on the terms we agreed when we made the loan.

They also learnt that if you spend money you haven't got sooner or later it has to be repaid, with interest. A very useful lesson.

I wouldn’t recommended this. It’s very risky and you’re putting your own home at risk. I’d politely decline and she will have to move somewhere smaller that she can afford.

I know this is now decided Jaffacake and I think your daughter will come round and, i hope, you will be back on friendly terms again soon

However, I think you are wrong David0205 about lending. The thing is not to lend what you can't afford to lose.
Over the years we have lent thousands of pounds to friends and family alike. One loan of £2000 in the late 90s was returned within days. On the other hand, one to our son for a car was returned out of his Saturday earnings over three years. If a loan is returned we can loan it again if someone will benefit.

We were fortunate to have inherited some money years ago. Not a lot, but a lot to us. Why not help out if we can? We have been helped in the past. What goes around comes around. It's only money when you have it - much much more when you don't.

Stay strong Jaffacake, I’m sure that she will realise she was being rather unreasonable/pushing her luck!

Thank you all for your advice. I have definitely decided not to be a guarantor for her as I would worry that she would struggle with the mortgage repayments if she lost her job or through illness.
She may have to sell and rent for a few years whilst the children are little and she knows I would help with childcare or some money.
At present we don't seem to be communicating as she assumed I would go along with her plan. So feeling rather battered at the moment.

In the depth of the housing recession in 1993, we guaranteed a mortgage for DD. The flat was in south London, it had two bedrooms, one to be let to pay the mortage. It cost £32,000, very little even then, and we had £30,000 in available savings.

The key factors were: that letting one bedroom would bring in an income, nearly equal to the mortgage payment, and we had enough savings to pay off the mortgage if she defaulted for any reason. We would not need to remortgage our house or meet the default payments from income.

As I understand it jaffacake2 your situation could leave you faced with doing one or the other. so do not do it.

You have made a very generous alternative offer to house your daughter and her children. Do not let your daughter emotional blackmail you, bully you or harrass you in to doing something, which I think you know, in your heart of hearts, could ruin your relationship with your daughter for ever and bankrupt you.

Yes I agree with Notspaghetti look at other ways you can help your daughter without being tied in to the guarantor agreement. If she can't live with you then maybe you can help with a rental somewhere until you have thought about downsizing or looked at alternatives. It's hard when its your child asking for help but I think this is one occasion when head must rule heart.

I wouldn’t do it. It’s a huge risk. One that the money lender doesn’t want to take, so why should you? I would keep offering a place in your home, otherwise I wouldn’t risk any of my money on her. You never know when you might need it, particularly being in a large house.

I know what you mean David0205. My Dad lent me £2,000 once because I was buying a car and was planning to take money from high interest savings for it. He had some money in a low interest account.

This was a long time ago when you got better interest in the Building Society. Anyway he lent me the money and I had paid him back within 12 months.

I think though that £2,000 is a much smaller amount and jobs were more secure in those days.

In addition don’t ever LEND to family give it.

Being a guarantor is tricky, it involves a valuation of your property, to be held as security against another loan, searches etc, so there may be costs involved of several thousands.
Can she realistically afford to meet the mortgage costs, gifting a lump sum to reduce the mortgage is easier, will reduce the payments and does not commit you beyond that amount.
So try to find another way to help you can, whatever you do don’t throw good money after bad, if the prospect is hopeless and the house is likely to be lost, DO NOT try to delay the inevitable. If any mortgage is foreclosed it takes time to get possession.

She needs a guarantor because the lender is doubtful about her ability to sustain the mortgage, for whatever reason.

A lender is not prepared to take the chance.
Food for thought?

It is midgey. I have been there. Low income, divorce and landlord was selling my rental house. Low income, couldn't show how I could meet the rent on another property despite NEVER missing or even being late on a rent payment.

It doesn’t really matter how reliable, hard working or conscientious any body is, stuff happens. Unless you can afford the mortgage (and possible debt collection fees) I wouldn’t even contemplate it. Isn’t the homeless mantra that we are all only three major events away from being homeless?

I am with NotSpaghetti. I would offer money before I would act as guarantor.