Hello all have a quick question someone may be able to answer, have been reading up and a little confused. I own a property worth 1mil, a family member is going to purchase a 50% share with 400k and are taking out a loan of 100k however I need to be the guarentor for it which isn't an issue, My question would be, let's say they didn't pay the loan off and bank defaulted them, I assume they would force the house sale and take it from their share seeing as they have put in 400k, so would have enough to cover it they wouldn't need it from me seeing as they have the assets to cover it. Also are they able to raise the loan amount without my permission? I assume I have to sign off on a significant change like that? Going to contact lawyers in couple weeks just been reading a lot and trying to wrap my head around things. If this question doesn't fit the forum feel free deleting it thanks for spending you time reading!
You'd be encouraged to seek independent legal advice around the guarantee - the crux of it is that if they fail to make their repayments then it is your responsibility as the guarantor to make them.
If they are using that property as security for the loan if they stop paying for the loan the mortgagee can take the property and sell it to recover their money. The equity will be left over and then you 2 can fight for your shares. You might have a greater claim if they were the person that borrowed, but it will be messy
