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Guarantor in mortgage

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  • 05-01-2008 1:54pm
    #1
    dugout16
    Closed Accounts Posts: 99 ✭✭


    Could anybody explain to me how a guarantor works in a mortgage and what conditions are attached to this?

    Thanks....


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    #2
    Electric
    Registered Users Posts: 539 ✭✭✭Electric


    From my limited understanding a guarantor basically undertakes to pay the mortgage if you can't or won't pay it. So if you default then whoever acted as guarantor for you is legally obliged to pay your mortgage and the bank can pursue them for it.

    Victor and SMcCarrick should be able to give you a more detailed and correct explaination though


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    #3
    eth0_
    Registered Users Posts: 10,846 ✭✭✭✭eth0_


    Said guarantor also has to earn a certain amount, even if they own their own house outright. Any loans they have in their name are taken into account when it comes to offering you approval.


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    #4
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    A guarantor is normally requested- when a person is seeking a mortgage above the salary multiple guidelines that the different institutions offer- irrespective of whether that person considers themselves capable of paying the mortgage or not. Thereafter its exactly as Electric put it- the guarantor is acting as a guarantee to the bank- that in the event of person with the mortgage not honouring the mortgage- they will do so in that persons stead.

    Its been a common occurence for guarantors to be sought, particularly when 20- somethings are buying their first property. My own parents agreed to act as guarantor for me a few years back- until such time as my salary had risen sufficiently to meet the banks then multiple requirements (which subsequently went crazy).

    Its pretty much a fact of life when seeking a mortgage these days- with house prices so far removed from any bearing on people's actual or possible salary.

    Its a very nice feeling when you eventually manage to get your parents removed as guarantors and manage to stand on your own two feet with your mortgage.


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    #5
    Electric
    Registered Users Posts: 539 ✭✭✭Electric


    Just as an aside SMcCarrick how do you go about having one removed as guarantor of a mortgage?

    I presume that you would have to provide sufficient evidence of earnings (ie payslips & p60 etc) and submit them for the bank's approval?


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    #6
    Cantab.
    Closed Accounts Posts: 1,444 ✭✭✭Cantab.


    dugout16 wrote: »
    Could anybody explain to me how a guarantor works in a mortgage and what conditions are attached to this?

    Thanks....

    Basically, if the **** hits the fan, the bank will be getting your inheritance money.

    Put another way, a kind of inter-generational mortgage that spreads the financial risk through 2 generations!


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    #7
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Electric wrote:
    Just as an aside SMcCarrick how do you go about having one removed as guarantor of a mortgage?

    I presume that you would have to provide sufficient evidence of earnings (ie payslips & p60 etc) and submit them for the bank's approval?

    Part of the conditions for getting the mortgage in the first place was that my salary had to be paid into the current account which paid the mortgage in the branch which issued the mortgage. Once my salary had risen sufficiently- the branch gave me a "Salary Declaration Form" which specified my current salary- and as I am on a salary, what the max of the scale is and how long it would take me to reach that point. I got our Personnel section to complete this form and brought it back to the bank- who were satisfied to remove my parents as guarantors on the mortgage. Note: this was Bank of Ireland.


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    #8
    jimmycrackcorm
    Registered Users Posts: 14,339 ✭✭✭✭jimmycrackcorm


    Electric wrote: »
    Just as an aside SMcCarrick how do you go about having one removed as guarantor of a mortgage?

    I presume that you would have to provide sufficient evidence of earnings (ie payslips & p60 etc) and submit them for the bank's approval?


    I was guarantor for a period of 8 months for a relation. Getting off was a simple process of the person acquiring a partner to take up half the mortgage responsibility.


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    #9
    Electric
    Registered Users Posts: 539 ✭✭✭Electric


    smccarrick wrote: »
    Part of the conditions for getting the mortgage in the first place was that my salary had to be paid into the current account which paid the mortgage in the branch which issued the mortgage. Once my salary had risen sufficiently- the branch gave me a "Salary Declaration Form" which specified my current salary- and as I am on a salary, what the max of the scale is and how long it would take me to reach that point. I got our Personnel section to complete this form and brought it back to the bank- who were satisfied to remove my parents as guarantors on the mortgage. Note: this was Bank of Ireland.

    Thanks!

    A friend of mine is looking to have her guarantor removed from her mortgage and wasn't sure how to go about it.


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