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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:
pootlingalonginthesun · 17/01/2022 21:10

@Dave20 I'm confused by you saying that she's never had a job. How will her rent be paid? With housing benefit? £750 is a lot, would HB pay that much?

De88 · 17/01/2022 21:11

@Dave20

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.
In that case, you can't do it!

Money and family/friends do not mix.

I hope your DW will be seeing this thread!

tara66 · 17/01/2022 21:11

I am not a solicitor but I think if your wife becomes guarantor and things go wrong - as you are married you are also liable for the debt too.

Chloemol · 17/01/2022 21:12

Don’t do it unless you can afford to pay all the rent if she defaults, and it’s very unlikely if she does default you will ever get the money back from her or her mother

HelloFrostyMorning · 17/01/2022 21:13

@Orphlids

Don’t do it. We had a lovely family friend, who became guarantor for his friend’s son. He ended up losing his own home and died a broken man. After watching what happened to him, I will never do it.

How sad... Sad Not an uncommon story though sadly! I have heard of stories of people going under completely and ending up with a demolished credit record, because because the person they were a guarantor for, failed to pay what they owed, and the people they owed the money to came for the guarantor, and took everything they had.

Also @Dave20 it's not true that you MUST be a homeowner to be a guarantor. I'm sorry to say that your wife's sister is lying (or has been misinformed.) More likely she is lying. She has probably just got a poor credit record. Not a brilliant sign if your wife's sister AND your niece cannot get credit or a private let house without a guarantor.

IamtheDevilsAvocado · 17/01/2022 21:13

@BooksAndGin

I would sit and do a benefit calculator with your wife online of what DN would get benefits and housing benefit wise and show her how hard it would be for DN to afford the rent, then do basic bills she'd need to pay out electric, gas, food, travel, council tax, water, nappies etc personally and it should bring her to her senses.
Even IF niece can pay and has money left kver monthly.

Tjere are ZERO guarantees she will do... 18 year olds are nor known for tjeur financial sense! Also she has the fall back that Auntie will pay it,

AtrociousCircumstance · 17/01/2022 21:14

You’d have a to be an absolute fool to do it. Intent on ruining your own life.

BorisBooster · 17/01/2022 21:15

Hell no !

Original poster
Dave20 · 17/01/2022 21:15

This is the south east, not London.
The points I made to DW were that we’re talking about an open financial agreement, and that the benefits system is complex, and housing benefits are complex.
DW said- but she’s never asked for money!
FFS- she’s missing the point entirely.
I said she may not be able to keep up with her payments, even through no fault of her own, and she could be stuck in a contract with her landlord. Meaning we’d be tied to it. How would we pay for it?
Why isn’t DW seeing this ?
DE said we needed some financial help from family in the past and she’s like to help - yes but I’ve never asked anyone to be a guarantor, that’s a different thing altogether.

OP posts:
HelloFrostyMorning · 17/01/2022 21:18

@Dave20

This is the south east, not London. The points I made to DW were that we’re talking about an open financial agreement, and that the benefits system is complex, and housing benefits are complex. DW said- but she’s never asked for money! FFS- she’s missing the point entirely. I said she may not be able to keep up with her payments, even through no fault of her own, and she could be stuck in a contract with her landlord. Meaning we’d be tied to it. How would we pay for it? Why isn’t DW seeing this ? DE said we needed some financial help from family in the past and she’s like to help - yes but I’ve never asked anyone to be a guarantor, that’s a different thing altogether.
I know this sounds cheesy @Dave20 but show your wife this thread.
HelloFrostyMorning · 17/01/2022 21:19

ALSO, just google 'reasons to NOT be a guarantor.' The stories are harrowing!

Oddbobbyboo · 17/01/2022 21:21

Universal credit barely covers the rent on social housing let alone a private rental. I would steer clear. She needs to wait for social housing.

Aquamarine1029 · 17/01/2022 21:26

I haven't even bothered to read anyone's responses...

NO. NO. NO. NO FUCKING WAY.

DO NOT DO THIS.

It will turn into a nightmare, it's almost a guarantee. Unless, and only unless, you can afford to pay every single bit of your niece's rent without a care in the world, and also pay for any damages she might incur, don't even think about being a guarantor.

NeverChange · 17/01/2022 21:32

Seriously, your wife needs to wise up!

If she's really not listening arrange an appointment with a solicitor to discuss as all guarantors should obtain independent legal advice. Ask him/her every single concern you have and maybe she'll listen.

Has your wife read this thread? Why not show it to her?

SpiderinaWingMirror · 17/01/2022 21:32

I doubt housing benefit would cover the rent, sorry to say. We are south east. Dd, when she had to claim due to covid was assessed as being "entitled" to a one bed flat rate. The amount this was set at by the council was 175 less than the cheapest one bed flat.the difference was almost the entire amount of Universal Credit she had to live off of.
Luckily she has parents.

Hesma · 17/01/2022 21:34

Don’t do it… I know that sounds harsh but you could and probably will end up hugely out of pocket.

MissingJigsawPiece · 17/01/2022 21:35

We are a guarantor for Ds's uni accommodation as he is our son and reliant on us financially whilst in education. The guarantor bit basically says if he defaults they do not pursue him but just go directly to us for the money. We pay it all anyway but still, they make it clear that the person who is meant to pay isn't, they go for the easy money, you.

Do not ever agree to be a guarantor for anyone unless your own child and even then only in certain circumstances. You are writing a blank cheque for the landlord. You would be crazy to even contemplate this. I cannot understand why your wife would risk her financial security to support her niece.

Cryalot2 · 17/01/2022 21:37

As others have said dont even think about it.
As you know the guarantor is liable for any debts .
Yes this may not be the intention but at the same time it still could happen.

Viviennemary · 17/01/2022 21:37

You must NOT do this. If she defaults on her rent you will be liable to pay it. Please don't.

SilverHairedCat · 17/01/2022 21:38

OK @ Dave20 - let's pretend she'll be living in Ashford in Kent (first place I thought of for the SE).

As an 18yo single mum (by the sounds of it?) the maximum housing benefit she'll get for private renting of a one bed flat is £625/month. She's already into arrears of £125 every month. I'm pretty sure they will say a baby isn't entitled to a separate bedroom, but even if she was able to get a 2 bed, the max she'd be getting in housing benefit is £725/month, so £25/month arrears.

www.ashford.gov.uk/benefits/local-housing-allowance/

Has anyone actually sat down with your niece and run the figures with her? Go through a budget planner with her - www.moneyhelper.org.uk/en/homes/renting/how-much-rent-can-you-afford - and see if she can acually afford to move out at all.

SuperLoudPoppingAction · 17/01/2022 21:38

Can't she get her name on the council house waiting list while looking for a private rental property?
And does the local council offer support for new renters?
Ours offers deposits, I think.

soapboxqueen · 17/01/2022 21:41

If your DW wants to help she can gift her some money but being a guarantor is very, very risky.

If you can't afford to pay the rent if she defaults, how does your DW expect to pay it? She needs to understand that the LL wants a guarantor because your dn is at a significant risk of defaulting. They didn't pick her name out of a hat. It's happening for a reason.

I know pp have mentioned 'can't pay, we'll take it away' but there was one episode I'll never forget. Mum and dad acted as guarantor for their eldest daughter for a flat. Daughter had a job but hadn't been paying the rent so the balliffs turned up at the parent's door. They owed thousands. The dad was beside himself because he couldn't afford to pay it and the mum just sat in a chair sobbing.

They just didn't have the money.

They tried and tried to get hold of the daughter because they didn't even know she was in arrears (she'd bought a new car and was going on holiday). Eventually she answered the phone and just told them it was their problem.

Which it was because they'd agreed to cover the rent and everything else.

Also, I'm not sure what happens if she defaults but chooses to stay in the flat. Will the LL kick her out or if he's getting paid by you, will the contract just stay in place until she decides otherwise? With you still paying.

DahliaMacNamara · 17/01/2022 21:43

Honestly, it's worrying enough when you have to do this for your own student DC, and that's usually for a very limited period where you can at least to some small extent keep an eye on things, and, if you're rich enough, pay the rent upfront and hope nobody trashes the place. I wouldn't contemplate casually signing away at best my peace of mind and at worst my family's security to keep someone else's child happy for five minutes. She probably has no idea of the reality of what she's asking, and by the sounds of it, neither does your DW.

ChiefStockingStuffer · 17/01/2022 21:44

Would be a Hard No from me.

Madness.

Have her watch a few episodes of 'can't pay? we'll take it away' ... so many family guarantors who would 'never do that' do just that.

Hillary17 · 17/01/2022 21:49

You can be a guarantor without being a home owner, so she’ll have other options. Personally wouldn’t risk it. She’s 18 and young, you would be liable for the whole tenancy payments and any damages etc.