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AIBU?

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Original poster

Unsure about being a guarantor

269 replies

Dave20 · 17/01/2022 19:49

So DWs niece is 18 and has a baby girl. She lives with her mum, DWs sister.
Now she’s a single mother and doesn’t want to be on the council list, as she thinks it’ll take too long.
She can rent privately, but needs a guarantor. You must earn a certain wage and be a home owner, which we are.
Now DW is all up for doing this because she trusts she will pay her rent and wants to help.
I have my reservations. Firstly, she’s only 18, never had a job, never paid a bill and a bit naive like young people can be.I think she’s too excited about the prospect of having a nice little flat, and is impatient to be on the council list.
DW is adamant that her niece will always pay her rent and is sensible enough to not go down the road of not paying.

However, even if she has every intention of paying, what if she can’t pay? DW just said, well in that case, we’d be notified that’s she’s fell behind on her payments and we would have to come to an arrangement. Her mum, DWs sister said she would pay the costs. DWs sister isn’t a home owner and doesn’t earn enough, she can’t be a guarantor herself.
But is it really risky being a guarantor? We have a mortgage and 3 children, we remortgage ever 2-5 years. Will this effect our applications? We have a long time on our mortgage.
What if her rent goes up? Does her benefits pay for this? I have no idea how benefits work personally.
I can’t really stop DW being a guarantor if she wants to, but we’re linked obviously financially.
Would a guarantor be linked financially to the person? Does it affect mortgage and credit applications? Is it for the duration of a tenancy?
Is it too risky?

OP posts:
dementedmummy · 17/01/2022 19:53

If DN defaults, you are on the hook for the whole thing. If you cannot afford to do so, do not act as guarantor. Also the search will appear in your own credit record which could affect your ability to refinance credit at any time

VickyEadieofThigh · 17/01/2022 19:55

Interesting. My oldest niece (now aged 31) was a parent at age 17 and attempted 3 times to live in her own home - each time, failed to pay her bills and had to retreat back to her mother's house. She finally managed it about 2 years ago, having worked in a job which paid enough for her to afford her rent and all other bills, as well as food, etc.

Fortunately, she didn't require a guarantor - but I wouldn't have touched it with a barge pole for a child who had at that time never worked nor paid her own bills. I wouldn't do it and I think your DW is mad to consider it.

SilverHairedCat · 17/01/2022 19:55

The guarantor is liable for any rent shortfall. If you don't trust the niece, and I'm not sure I would either, then don't do it.

Have you / your wife sat down with her to go over her income to ensure she's actually got enough money coming in each month to cover the rent, bills, food, baby items etc?

If you're satisfied that she's got enough money coming in and that the rent can be paid (preferably direct to the landlord if it's UC / housing benefit) then maybe you'll feel better about it.

If she doesn't have enough on paper, then walk away.

Asdf12345 · 17/01/2022 19:55

Don’t do it.

It’s a blank cheque to the landlord, if you must get involved offer to loan her the years rent to pay upfront and take payment from her monthly.

IDespairOfTheHumanRace · 17/01/2022 19:56

For Christ's sake don't do it - it is an absolute recipe for disaster for you and your own family. That is all that needs to be said.

Danikm151 · 17/01/2022 19:57

If you have reservations, don’t do it. It’s legally binding. For one year, you could be looking at a bill of over £6k!

If your wife decides to go ahead, give the niece some budgeting advice? Or signpost to a service to help

Local housing allowances cary by council but housing benefit will only cover up to a certain amount. If the rent is higher then she will have to make up the shortfall.

Bringonsummer19 · 17/01/2022 19:57

I think you need to understand the financials. Does her HB cover the rent? Will that HB be paid directly through to the landlord? I imagine the 18 year old has a level of maturity (being a mum) but understanding the importance of paying bills/council tax etc is a big thing to get her head around.

I would certainly want a direct line to the landlord the moment even one payment was late.

An 18 year old with a baby and the responsibility of taking care of a home and bills etc is a big move. Would it not make more sense for her to get the support of her mum?

I have been a guarantor but did do due diligence to get comfortable.

Danikm151 · 17/01/2022 19:57

*vary not cary

alittlequinnie · 17/01/2022 19:58

Yes - be very wary.

My brother is guarantor for his daughter.

He is liable for all rent - and the deposit - AND he has to pay for all the repairs etc that need doing.

I agree with poster above - unless you can afford to pay the whole term's rent and any repairs then don't sign the guarantee - the responsibility will be all yours!

BooksAndGin · 17/01/2022 19:59

Don't mix business with pleasure!
At 18 she hasn't got a clue about bills, don't forget the cost of living is going to be sky high this year and only get worse... if she doesn't work, she won't be getting that much on benefits. It's very likely she will struggle at one point or another and then you'll be liable.
I would just insist she waits on the council and in the mean time saves what money she can.

EverNapping · 17/01/2022 19:59

Don't do it.

There's nothing to make her pay her rent if she decides to spot her job, or stop paying.

Your DW could get a CCJ, that'd kill any credit/mortgage options.

It is ridiculously risky.

BooksAndGin · 17/01/2022 20:00

Also benefits won't pay her full rent, what they don't cover she'll have to pay out of her universal credit which isn't much for a 18 year old with one child. Has she even checked she can afford the rent?

MadMadMadamMim · 17/01/2022 20:00

I wouldn't. I'd be very wary of doing it for my own DC - never mind a DN - because in effect you are stating that Come what may, I guarantee your rent will be paid. I am prepared to put my own house up as security for this. This is why they require house owners as guarantors - to ensure that you DO have the assets to cover this guarantee.

That's what being a guarantor means. If her rent is, say, £700 a month - then you are guaranteeing that you will pay this every month for as long as necessary in the event that she decides she can't or won't. That's a big promise to make for someone...

TheAgeOfAquarius · 17/01/2022 20:02

Also keep in mind you will also be liable for any damage to the property, over and above what her security deposit does not cover

Sparklingbrook · 17/01/2022 20:03

I was guarantor for my DS a few years ago for his student let. Wouldn't do it for any wider family though, it could all become incredibly awkward.

madisonbridges · 17/01/2022 20:04

The reason they ask for guarantors is because of the high rate of defaulters. If you decide to do this, you have to go in with the understanding that the likelihood is that she will default and you will have to pay. As a relative that is going to cause family problems, between you and your wife, or your wife and her sister. Honestly, there is no good outcome with family and money.
Judge Judy once said that you should never lend money to family because it causes too many problems when they fail to pay back. Only get involved if you have enough money to be able to afford to give them the money and say it's up to you if you pay it back and have no expectations. I think that's very wise. Are you wealthy enough to support her and pay for yourselves as well?

Original poster
Dave20 · 17/01/2022 20:04

Her mum can’t be a guarantor, she isn’t a home owner.
DW said she’d consider it. I know DW doesn’t earn enough as she’s on 10k per year.
Would they take a joint guarantor? I’m thinking of saying no anyway, so DW wouldn’t have a choice as she doesn’t earn enough. They apparently ( landlord)want a guarantor to earn £22 k per year.
If DW wants to do it, she’s on her own as I would rather not.

OP posts:
Lastater · 17/01/2022 20:05

I wouldn't, for all the reasons previously mentioned

NameChangeCity123 · 17/01/2022 20:06

I wouldn't do it. My friend asked me to go guarantor on a loan and I said no as it made me uncomfortable. It makes things awkward IMO

Original poster
Dave20 · 17/01/2022 20:06

If she defaulted, we couldn’t pay her rent! We don’t have £750 per month spare to pay! I doubt many would.
DW is convinced she’s sensible and will pay and wouldn’t put us in that position.

OP posts:
StartingGrid · 17/01/2022 20:07

Don't do it... DP years back stood guarantor for someone and ended up the agent taking him to court, they lost as I researched hard for a defence, but it's not an experience either of us would ever repeat! He wasn't even a homeowner at the time, the paperwork was improper and the agency a shambles who didn't follow procedure, but it was still a few months of stress.

Galliano · 17/01/2022 20:08

To the question you asked re impact on your own mortgage I’ve guaranteed rent for my own 3 DC and it’s not something I’ve ever been asked about in any credit application or any other financial situation.

They are not securing the potential debt against your property - your mortgage lender would not allow this.

Meandthesky · 17/01/2022 20:09

I’ve had my mum as guarantor a couple of times when renting. I made a lot of stupid financial decisions in my 20s but no matter what I always paid my rent. My mum was never called upon to pay anything. I’m very grateful for her agreeing to be my guarantor.

However, I would be extremely wary of doing it for an 18 year old who’s never lived away from home or had a job and who is relying on benefits to pay her rent and bills. Especially an 18 year old who wasn’t my own child.

She needs to be more patient about a council flat, save as much as she can while living at home and prove she can make responsible financial choices.

Worldgonecrazy · 17/01/2022 20:11

Don’t do it. The AST may be for 6 months but you don’t get any say in whether it’s extended, so if the neice doesn’t pay you could be stuck paying her rent, and if the landlord does evict, you will be liable for any losses. The guarantor has very little legal recourse. (Bitter experience!)

delilahbucket · 17/01/2022 20:13

Do not get involved. You are liable for the rent if it is unpaid. The fact that they want you to be a home owner suggests they will put a charge on your house, which can cause you no end of problems if you want to remortgage or move, and it risks your home if the rent isn't paid. I would never be a guarantor for anyone. They fact that someone needs one means that no one trusts they can afford it, and you should take heed of what they think.