Question by maria: Do banks still give out mortgages if someone stands as a guarantor?
My husband makes enough money to get the mortgage that we want (well judging from the websites I’ve looked at) however he has no credit rating, not a bad one he just has never had any credit. His family would be willing to go guarantor for him but unsure if banks still do this after the credit crunch? Thanks in advance
Should have mentioned we are in the UK
Best answer:
Answer by TK
I’m sure a local bank or credit union may be interested in such an arrangement, but the guarantors may well have to secure their guaranty in addition to the mortgage that you and your husband will be required to give the bank/credit union.
The guarantors might be fine with this initially, but eventually they may want to do something with the equity in their home that has been tied up, or they might even want to sell their home and then what would happen?
You may want to speak to an accountant and ask him or her for advice on which local institutions has the flexibility to respond to your situation. If you need guarantors at all, then the financial and legal arrangements must be fair to them as well. Bankers probably won’t be concerned with being “fair” to the guarantors, so you need to be sure that your loan guarantors don’t put themselves into an inequitable situation unknowingly.
Speaking to a competent accountant (or real estate lawyer) first and explaining your situation and exploring the concept of guarantors with him or her is where I would begin this process.
Good luck.
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He probably has a credit rating, even though you think he has never had credit. What about you? You’re married, and it is your joint credit rating which is important.
Are one of you a member of a union or a credit union–often a good option in such situations.
Opening ONE credit card, using it and paying it on time and in full, can be a good way to establish credit.
Depends on lender whether they will work with guarantor or not.
Start with your bank.