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Removing Guarantor

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  • 16-07-2013 9:34am
    #1
    sticker
    Registered Users Posts: 3,056 ✭✭✭


    Hi,

    I have a tracker mortgage with Bank of Scotland - originally taken with First Active. A relative went as guarantor at the time of application. I wish to remove them now.

    Is there any truth that the bank can remove the tracker aspect of my mortgage agreement if the guarantor is removed?

    Thanks in advance...


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    #2
    seamus
    Registered Users Posts: 68,317 ✭✭✭✭seamus


    If you wish to enact a change to the terms of your mortgage, the bank may be entitled to insist that you change your rate too. The contract is a two-way agreement so the bank can refuse to make changes to the contract unless you agree to drop the tracker rate.

    It's generally only happening where people are changing the amount or term of their mortgage, but I imagine the banks will do everything they can to get rid of trackers.

    They can't just take it away though without asking you, so it's no harm to start the discussion.


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    #3
    sticker
    Registered Users Posts: 3,056 ✭✭✭sticker


    I just noticed on another thread here - see post 6 - Is this not true?

    http://www.boards.ie/vbulletin/showthread.php?t=2056779463


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    #4
    TwoShedsJackson
    Closed Accounts Posts: 9,438 ✭✭✭TwoShedsJackson


    The only people who can answer this properly for you are your bank - ring them and ask them, it won't commit you to doing anything.


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    #5
    sticker
    Registered Users Posts: 3,056 ✭✭✭sticker


    TwoShedsJackson wrote: »
    The only people who can answer this properly for you are your bank - ring them and ask them, it won't commit you to doing anything.

    I just wanted to get legal clarification - I know all banks want to remove trackers where possible and wanted to check my rights in these cases...

    The guarantor wants to purchase other property and to be a guarantor effects this so I'm looking into removing him...

    It would be a complete DISASTER to lose the tracker...


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    #6
    chris85
    Registered Users Posts: 4,502 ✭✭✭chris85


    sticker wrote: »
    Hi,

    I have a tracker mortgage with Bank of Scotland - originally taken with First Active. A relative went as guarantor at the time of application. I wish to remove them now.

    Is there any truth that the bank can remove the tracker aspect of my mortgage agreement if the guarantor is removed?

    Thanks in advance...

    In fairness for the bank what have they got to gain by taking off the guarantor? They wont be quick to do this as it leaves them with a greater risk. I would doubt they would go for it to be honest and if they do consider it I would expect for them to force a rate change.


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    #7
    Marcusm
    Registered Users Posts: 10,327 ✭✭✭✭Marcusm


    sticker wrote: »
    I just wanted to get legal clarification - I know all banks want to remove trackers where possible and wanted to check my rights in these cases...

    The guarantor wants to purchase other property and to be a guarantor effects this so I'm looking into removing him...

    It would be a complete DISASTER to lose the tracker...

    You'll have little prospect o f success unless your own financial position has significantly improved since the initial loan approval and you would qualify for the loan by yourself (including LTV) at this stage. Even then, the bank should want to get some benefit - eg payoff some extra capital- for giving up what was regarded as necessary security. Clearly, only a lunatic would allow the removal of the guarantor if you are in negative equity so I assume that does not apply.


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    #8
    Pawwed Rig
    Moderators, Category Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 22,379 CMod ✭✭✭✭Pawwed Rig


    sticker wrote: »

    It would be a complete DISASTER to lose the tracker...

    You could talk to the bank about it. They will tell you what the options are. There will be nothing binding until you sign a new agreement.


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    #9
    sticker
    Registered Users Posts: 3,056 ✭✭✭sticker


    chris85 wrote: »
    In fairness for the bank what have they got to gain by taking off the guarantor? They wont be quick to do this as it leaves them with a greater risk. I would doubt they would go for it to be honest and if they do consider it I would expect for them to force a rate change.

    If they won't, then that's something we would deal with - but I would think the good levels of home income and not a missed repayment in 6 years might be good factors in going it alone!

    I just wanted to check what my rights might be in this instance before approaching the bank...


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    #10
    sticker
    Registered Users Posts: 3,056 ✭✭✭sticker


    Thanks for all the advise guys - Much appreciated.

    I'll approach the bank and see what they suggest....


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    #11
    roro2
    Registered Users Posts: 412 ✭✭roro2


    As above, the bank can't remove your Tracker without your agreement, so there's nothing to lose by talking to them.

    But you need to be aware of a few things. It's not as simple as asking the bank to remove the guarantor - there was obviously a reason for the bank requiring the guarantor in the first place, and your financial strength would need to have improved substantially in the meantime so that the overall risks are much lower for the bank now, even after taking into account the fall in value of the bank's security in the period. (And considering 6 years ago was the peak for lax lending conditions.) There is no obligation on the bank to even consider your request and, arguably, they shouldn't.

    But... if they agreed, it would also depend on how they viewed the new arrangement. If it requires new mortgage documentation, your Tracker will almost certainly be gone.

    An added obstacle is that Bank of Scotland Ireland isn't lending anymore and actually doesn't even exist - it's mortgages are serviced by Certus, which makes obtaining any sort of credit decision more difficult, especially if this is viewed as a "new" mortgage.

    I wouldn't be hopeful of even having the guarantor removed, but there's nothing to stop you asking.


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    #12
    sticker
    Registered Users Posts: 3,056 ✭✭✭sticker


    roro2 wrote: »
    As above, the bank can't remove your Tracker without your agreement, so there's nothing to lose by talking to them.

    But you need to be aware of a few things. It's not as simple as asking the bank to remove the guarantor - there was obviously a reason for the bank requiring the guarantor in the first place, and your financial strength would need to have improved substantially in the meantime so that the overall risks are much lower for the bank now, even after taking into account the fall in value of the bank's security in the period. (And considering 6 years ago was the peak for lax lending conditions.) There is no obligation on the bank to even consider your request and, arguably, they shouldn't.

    But... if they agreed, it would also depend on how they viewed the new arrangement. If it requires new mortgage documentation, your Tracker will almost certainly be gone.

    An added obstacle is that Bank of Scotland Ireland isn't lending anymore and actually doesn't even exist - it's mortgages are serviced by Certus, which makes obtaining any sort of credit decision more difficult, especially if this is viewed as a "new" mortgage.

    I wouldn't be hopeful of even having the guarantor removed, but there's nothing to stop you asking.

    Some very valid points - all accepted - thanks!


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    #13
    Alanm
    Registered Users Posts: 305 ✭✭Alanm


    I went through this recently with Ulster Bank. They didn't make it easy, I had to apply as if I was taking out a mortgage for the first time (they needed all the usual bank statements/pay slips etc etc). It took around 6 months in total, however, I finally got a letter from them confirming that my guarantor had been removed. They never once mentioned removing my tracker or changing rate and I made sure to specify clearly on all documentation that my existing tracker rate should not be touched. As long as you qualify for the required mortgage on your own now, I think you should be able to get it done.


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    #14
    sKeith
    Closed Accounts Posts: 13,404 ✭✭✭✭sKeith


    I was in same situation as your relative. I was all worried about not being able to get mortgage while already being on another mortgage. In the end, the bank gave me my approval anyhow. I am still guantor on another mortgage which I contribute 0 moneys too and I have my own mortgage. Is there any harm in your relative trying first to get mortgage approval first, and if refused, then your hand is forced.


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    #15
    sticker
    Registered Users Posts: 3,056 ✭✭✭sticker


    Alanm wrote: »
    I went through this recently with Ulster Bank. They didn't make it easy, I had to apply as if I was taking out a mortgage for the first time (they needed all the usual bank statements/pay slips etc etc). It took around 6 months in total, however, I finally got a letter from them confirming that my guarantor had been removed. They never once mentioned removing my tracker or changing rate and I made sure to specify clearly on all documentation that my existing tracker rate should not be touched. As long as you qualify for the required mortgage on your own now, I think you should be able to get it done.

    Many thanks Alanm - that helps a lot - Cheers


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    #16
    sticker
    Registered Users Posts: 3,056 ✭✭✭sticker


    sKeith wrote: »
    I was in same situation as your relative. I was all worried about not being able to get mortgage while already being on another mortgage. In the end, the bank gave me my approval anyhow. I am still guantor on another mortgage which I contribute 0 moneys too and I have my own mortgage. Is there any harm in your relative trying first to get mortgage approval first, and if refused, then your hand is forced.

    ...Interesting! Thanks sKeith - I'll ask him to look into it...


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    #17
    murphaph
    Registered Users Posts: 19,022 ✭✭✭✭murphaph


    sticker wrote: »
    ...Interesting! Thanks sKeith - I'll ask him to look into it...
    Hmmm, if he goes down that road and takes out his own mortgage and you default (anything can happen) he'll be up sh!t creek without a paddle.

    Being a guarantor is a serious business. It's not just about getting a few forms stamped so someone can get a mortgage.

    If he is to go down that road because he really wants to take out a mortgage and you are not able to remove him as guarantor then perhaps you should offer to be guarantor on his borrowings too, a sort of mutually assured destruction if you will ;)


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    #18
    sticker
    Registered Users Posts: 3,056 ✭✭✭sticker


    murphaph wrote: »
    Hmmm, if he goes down that road and takes out his own mortgage and you default (anything can happen) he'll be up sh!t creek without a paddle.

    Being a guarantor is a serious business. It's not just about getting a few forms stamped so someone can get a mortgage.

    If he is to go down that road because he really wants to take out a mortgage and you are not able to remove him as guarantor then perhaps you should offer to be guarantor on his borrowings too, a sort of mutually assured destruction if you will ;)

    Thanks


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