So you’re thinking about going guarantor or having a guarantor. Well you’ve come to the right page on our website.
Here’s what we’d recommend you do prior to taking the next steps:
Firstly, watch this video with your potential guarantor:
The next steps after that are:
- Be sure your potential guarantors know that to go guarantor is to allow the bank to put a mortgage on their title, and if they own the property outright to hand that title back to the bank to secure your mortgage.
- Be aware that by allowing your guarantor to meet with your broker that you are also giving your broker consent to discuss your personal situation with them and any risks your broker sees associated with a guarantor loan.
- Read this article and the guarantor pledge here which we have our clients sign (both are a great place to start a conversation with your guarantors.) It’s a lot to ask of them and a big responsibility for you to take on, so if at any stage you don’t feel comfortable or they don’t feel comfortable then I’d recommend we proceed down a different path. It’s also really important that you feel you’ll have capacity to make repayments significantly over and above minimum so that we can remove them as guarantor.
- The next step would be for you to email me your guarantor’s fact find (get them to complete the same one you did to meet with your broker). Once your broker looks over information in their fact find they will check and see if your guarantor is suited to chat further or if there is a reason they cannot go guarantor that is evident up front.
- It’s also worth having your guarantor look over this gift declaration as some parents are more comfortable helping in this way and hits means they do not need to put up a security or go on your loan.
- Please note that some banks will have it as a condition of the loan that your guarantors need to get independent legal advice and sign off. Even if the bank does not require this we still recommend this as prudent for all guarantors so they understand the documents they are signing.