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guarantor for rental property, any experience or advice?

(26 Posts)
thing1 Wed 10-Jul-13 20:37:56

Regular poster but nc as I don't want this linked to other posts.

Posted here for traffic, being asked for answer asap..... and AIBU scares me.

DH and I are (mortgaged) homeowners, I'm expecting DC1 in a few weeks. We have worked & saved hard in preparation for the new arrival and mat leave. Relative & OH had a business but is packing it in as it's not what they expected it to be. They will lose their home with their DC, one party will be unemployed for a time. They intend to rent and need a guarantor who is a home owner so have asked us.

I have asked for more info as I am not comfortable securing our home against their tenancy. Frankly they seem to have a cavalier attitude towards stability and security, illustrated by abandoning a business/career/home for unemployment.... For the SECOND TIME in 18 months.

Is a home owner guarantor request common? What are we letting ourselves in for? Is our own home at risk? If you can help, any views, experiences or knowledge would be welcomed. TIA

specialsubject Thu 11-Jul-13 22:25:29

Guarantor request is quite standard, and the idea will be that a home owner is more stable.

your liability will be for unpaid rent, damage, landlord's costs for any eviction - basically anything that they could run up. Can you afford this and still pay your mortgage? Because if not, then your home IS at risk.

of course if they pay their bills and behave, you pay nothing. Are you confident of this?

it doesn't sound like it to me....and I can't say I blame you.

cakebaby Thu 11-Jul-13 22:52:10

Thanks special since I posted this I've done some digging a and found they are applying to rent a large property with a rental nearly equivalent to our mortgage. Also, it's not just a matter of us signing a form as they claim, we need to provide all our employment/income/assets details and be credit checked the same as the applicants.
Not exactly as it was first sold to us! It wouldn't cause us any issues but I really don't want them knowing all our financial intricacies.

I am very uneasy about the whole thing, it's not something I would have requested.

cakebaby Thu 11-Jul-13 22:53:49

Epic nc fail! Never mind blush

SuperiorCat Thu 11-Jul-13 23:09:14

Nothing to add to what special has said and you have found out, other than a warning to think very carefully before agreeing to this.

I wouldn't IIWY.

cakebaby Thu 11-Jul-13 23:19:17

Thank you. Gut feeling is to run in opposite direction, so reckon that's what will happen!

mzungu Thu 11-Jul-13 23:20:27

I would be wary of this. We are selling up and going into rented for a number of reasons but we did not need a guarantor unless credit check results were very poor or income insufficient to pay rent.

specialsubject Fri 12-Jul-13 13:09:59

love the 'epic fail'.

this sounds like a 'head for the hills' situation. Better a falling out than a loss of home for you.

I think it goes 'sorry, but we are not in a position to do this'. And they need to cut their cloth according to their means. Living with children in a small flat won't kill anybody.

SavoyCabbage Fri 12-Jul-13 13:17:00

If they are not trustworthy then don't do it. If they sign a year lease and then decide to go somewhere else after five months, you will be chased for seven months,

They sound flighty.

teabagpleb Fri 12-Jul-13 16:00:32

Pretty much anyone under 30 and/or earning under £30k is asked for guarantors nowadays - I've done it for a couple friends and had now-DP do it for me when I was a student.

Filled in forms (sent direct to the agents, so friends didn't get the detail), friends paid rent, not been a problem.

Your home shouldn't be at risk though - you're risking their notice period, so up to 6 months rent if they don't pay from the start of an AST. So depends how significant that would be to you. You could argue that the landlord is only liable for rent until they get another tenant, but not the sort of hassle you need with a baby.

And whether you think it's much of a risk...sounds like somewhere you really don't want to go, in the circs!

Worriedmind Fri 12-Jul-13 16:48:24

My mum did it for me, she had to provide proof of her mortgage and all earnings.

QuiteOldGal Fri 12-Jul-13 18:58:21

Why do they have to rent a large home, Can't they manage with something smaller like people who buy houses have to, so it would not be such a burden to whoever is the guarantor

I am guarantor for my DS at University, we pay his rent anyway and it is only his share for a year and through some student agency so all should be OK. I was not credit checked for this.

I would certainly think twice about being guarantor for a relative who doesn't sound that dependable. You could be liable for several thousand £.

cakebaby Fri 12-Jul-13 22:09:39

Thanks everyone, advice much appreciated. As I feared this is in danger of causing a family rift shock

Parents think we should do it out of family loyalty and be more trusting, but we are uneasy and I am feeling pressured into it already! I am concerned it could inadvertently go wrong and our finances wiped out at a time we need stability the most.

We live within our means, I think they should too. It would be amazing to have spare bedrooms and reception rooms and en suites with a big garden and parking..... but we don't as we live within our means and don't have anyone to bail us out.

SuperiorCat Fri 12-Jul-13 23:54:20

A"Pretty much anyone under 30 and/or earning under £30k is asked for guarantors nowadays " - not necessarily. My friend has about ten rental properties and they credit check the applicant, and only if the applicant comes back as being a credit risk, do they ask for a guarantor.

SuperiorCat Fri 12-Jul-13 23:55:37

Forgot to add, if parents think family should act as guarantor, why can't they do it then?

If there is a danger of a family rift then you could always lie and say you don't have a good credit history so would fail a credit check.

cakebaby Sat 13-Jul-13 19:57:49

Parents are no longer home owners, they sold on retirement and are busy spending the proceeds on frivolous but expensive items

Honestly I'm sure DH was found on the doorstep grin

Our jobs mean we would not be permitted to have bad credit histories so we can't use that excuse! Like your lateral thinking though!

SuperiorCat Sun 14-Jul-13 10:40:35

Ok...then could your jobs mean that you are not allowed to stand guarantor for anyone? Surely they are not going to know the specifics of your employment contract?

Or could you say that it is in the ts & cs of your mortgage that you cannot put your house at risk by acting as guarantor?

Just trying to think of ways of avoiding you being the supposed bad guy, you really don't want to risk this.

Signet2012 Sun 14-Jul-13 10:46:15

Go carefully. My mother signed to be gurantor for my ex sil. As soon as papers where signed she kicked my brother out. She did meet the rent but then moved out without notice leaving the house in a terrible state.

We had to paint a 5 bedrooms town house from top to bottom and remove rubbish, replace things, clean it. Dm is still expecting a bill in the region of 2k but had I not done the test of it would have nearer 6k.

specialsubject Sun 14-Jul-13 11:16:54

a family rift is preferable to you losing your home.

tell them what you've told us, don't dig yourself into a hole with excuses. If they throw a strop at the facts, they are even less the type of people to trust with this.

GwenStacy Sun 14-Jul-13 11:22:07

SuperiorCat - I think it depends on the agency - we were asked to supply a guarantor as my husband is self employed - we both have excellent credit ratings and passed the reference checks with flying colours, but the LL wanted the reassurance of my MiL guaranteeing the rent

Signet2012 Sun 14-Jul-13 12:58:46

By the way. When she asked me I declined and said it was on the terms of my mortgage I couldn't be responsible for any other properties. I lied but it was an easy out

Arcticspill Sun 14-Jul-13 14:26:05

I rent a property in a town I visit regularly. I have no earned income and had to have my husband as my guarantor so that if I default in any way he will pay everything. I / we have never been asked for a guarantor for any property dealings unless there has a clear question mark over our ability to Meet our obligations - in this case my lack of income . It is not something we would take on unless we could make the payments and wanted to do so . My husband is a lawyer.

specialsubject Sun 14-Jul-13 15:28:27

aha - good solution, OP!

cakebaby Sun 14-Jul-13 18:13:44

Aha! superior you may have something there. Doesn't sit comfortably, but a little 'not permitted to' type lie could be the way forward.

Thank you for all your advice and suggestions. This has to be resolved this week one way or the other!

SuperiorCat Sun 14-Jul-13 20:58:18

Don't feel bad about a little white lie - it gets you off the hook without you having to say an outright no.

34DD Wed 17-Jul-13 15:17:52

Message withdrawn at poster's request.

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