Being a Guarantor and and Owner at the same time?

Hi there,

My partner and I own a home together and we're discussing with a broker regarding refinancing. He suggested for me to be on the mortgage alone with my wife as a guarantor - this is in case my wife solely wants to enter on a borrowing capacity with her mother in the future. My broker suggesting that being a guarantor allows her to have a stronger borrowing capacity by herself.

My wife is questioning the legalities of it in case I go bankrupt or we split etc.

Thoughts?
Thanks

 

That would be a good question for a solicitor. And a guarantor is always requiried to get INDEPENDENT legal advice. That means wife asks that question without hubby attending.

 

If you are joint owners you will both need to mortgage the property. But the loan could be in one name.

What do you want to know specifically in relation to bankruptcy?

 

Hi Terryw

It's more towards if I bankrupt or we split then, how will this affect my wife if she was a guarantor vs a mortgagor instead. My broker is actually saying that she's safer being a guarantor (security guarantee) as she's only liable for the security and not the mortgage.

Do you also offer solicitor guarantee certificate?

 

ownership is what counts mainly, but who pays the loan is also important. The broker shouldn't be advising on the safety aspect and they seem to be confusing a mortgage with a loan. The mortgage is the security for the loan

If a person defaults on a loan the security can be used to satisfy the debt, if all they are giving is a security guarantee they are not directly liable for the loan but if they don't pay they will lose their property, their share of the property as well.