Affects of going Guarantor?

bloNdie1

Hi Guys,

Hope I am in the right place..

A very close family member has asked me to go guarantor on a loan of €20K over 4 years.

I would normally have no problem with this as I am in a permanent, pensionable job. This family member is not but I know that the repayments will be met.

However, I would intend on applying for a mortgage in the next 2 years so would my being guarantor for someone else affect my ability to get a mortgage in the future?

Many thanks!

D3PO

bloNdie1 wrote: »

I would normally have no problem with this as I am in a permanent, pensionable job. This family member is not but I know that the repayments will be met.

You see thats the point. You do not or cannot say with any certainty that the repayments will be met as you cannot garantee this family member will not lose their job (Fingers crossed they dont)

As your potentially liable for the repayments the banks will take this expenditure into account circa €500 per month so that will severly impact your ability to get a mortgage.

bloNdie1

Not good.. Have been saving my a$$ off for the last while to try and get the funds together for a mortgage. I understand there is a risk but I do know that I would never be burdened with the repayments. But then again, I can understand that the bank obviously don't know that...

How do you say no to your mother!!

JoeyJJ

Thats a tough spot, I don't envy you. Hope it works out.

I can see it reducing the amount that banks will lend when the day comes your your mortgage application being processed.

mailforkev

Tough one, it will affect your mortgage getting ability, possibly quite considerably the way the banks are at the moment.

bloNdie1 wrote: »

How do you say no to your mother!!

I don't mean to sound harsh but you need to live your own life, hopefully someone who cares about you will understand this.

bloNdie1

I don't think I'll have a choice but to go ahead with it.. I can't turn her down. I know if roles were reversed she would do it for me. Worst come to worst, I'll just have to wait it out until the loan is repaid in full.

On the upside, by the time the loan is cleared I should have a hell of a lot more savings.. Still, waiting an extra 2 years+ kinda throws my lifes plans out of whack.. And if I did say no, all I would hear for the next few years would be "after all I've done for you.. etc etc etc.." Nobody needs that!!

Kimia

bloNdie1 wrote: »

I don't think I'll have a choice but to go ahead with it.. I can't turn her down. I know if roles were reversed she would do it for me. Worst come to worst, I'll just have to wait it out until the loan is repaid in full.

On the upside, by the time the loan is cleared I should have a hell of a lot more savings.. Still, waiting an extra 2 years+ kinda throws my lifes plans out of whack.. And if I did say no, all I would hear for the next few years would be "after all I've done for you.. etc etc etc.." Nobody needs that!!

Wouldn't you be waiting 4+ years, if not more if the payments are delayed? Budget conservatively.

D3PO

tough situation Blondie you will have to do what you think is right and not take the opinions on here onboard.

Personally Id be declining to go gaurantor unless the loan was essential. If it were so my mother could get a new car or have her house renovated then Id flat out say no.

bloNdie1

Definitely, if it was wasn't necessary I would straight out say no. But I know it is and it would help them out a lot ya know..

Decisions decisons..

One to sleep on I reckon!

Thanks lads

magentas

that's a tough one alright. but is she aware of how this may affect you down the line? Criteria for getting a mortgage is so strict now and this really could go against you.
I'm all for helping people out, especially family but I think you need to explain everything to her. You're saying she'd do the same for you but if the situation was reversed and if by her doing the same for you meant it could seriously impact on her future(ie buying a house), would you allow her to do it for you?

You need to look at the bigger picture here blondie, having just taken out a mortgage this year after 8yrs of renting I can honestly say it's one of the best decisions I've ever made. It's a 35yr loan and if you're serious about it you can't afford to loose any more years on paying someone elses mortgage.

Hope it all works out for you

Da GOAT

id defo say no to that. If she cant get a loan for 20k then they have deemed her unable to repay. It so depends on what its for, if its for the house/car etc or any luxury type item then u shud say no.

esp if its for a car, u can buy a car for less than 500e.

the_syco

bloNdie1 wrote: »

A very close family member has asked me to go guarantor on a loan of €20K over 4 years.

Why do they need a guarantor? Has she not been good for loans in the past? Ask your husband/best mate do they think if she has a gambling problem?

astrofool

What can she get without a guarantor? Could you lend her the difference, and she pay you back at the same time?

Going guarantor will affect the mortgage you can take, quite considerably, as your property, would be seen as an asset to sell and raise money to pay back that loan (if worst came to worst).