Unsure about being a guarantor

[Dave20]

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?

she will get a housing association or council property in due course

Round here that would be about when the baby starts university. There’s a massive shortage of social housing. She’ll have no option other than to rent privately. Having said that, I wouldn’t be a guarantor for her - or at least not unless you could comfortably cover her rent if she defaults.

On the flip side of this, I was your DN. My Mum is disabled and doesn't work, I don't have a Dad in my life, I was desparate to move out, I knew the importance of paying rent etc, but nobody would touch me with a barge pole without a guarantor. My uncle took on that responsibility, and believe me I can't thank him enough. We had a chat, came up with an agreement, I never missed a rent payment and after 18 month the letting agency "let him off the hook" so to speak as I no longer needed a guarantor. Only you know how serious she is. Not every young person is irresponsible with money, it is a risk for you, but does she appreciate that? Can she tell you how the rent will be paid without question? Has she got a budget set up? All things that I think settled my uncle when he offered to be my guarantor

Don't do it, it will go wrong for every good story there will be 10 that go wrong.

If i was in this position and my wife/husband tried to force me to do it I would leave them as it will be easier than the aftermath when it goes wrong

Can i just say kudos to you OP for considering this properly. Personally i would advise against. I am not saying your niece would do it on purpose but what if she genuinely can't pay? Say she recieves a sanction or has a missing benefit payment or any number of things that could occur. She is only 18 new to the whole adulting world of bills etc. And that of course takes some getting used to. As she has a baby aswell i think she would be better off waiting for the council flat as i believe that there are more safeguards in place when it comes to potentially getting evicted if you cant pay etc.thsn with a private rent. It will vary by area and council obviously but i do know that some councils have health promotion schemes for all their tenants , i know a friend whom has a fruit and veg basket delivered every week, received a Christmas present and food parcel and has access to budgeting advice for example. I am wondering if this and other support may be more likely to come with a council place and could be good for niece. I know that is a different issue but i am just shoving my two penneth in as it were . Very best of luck to you OP, difficult situation all round and i can understand your wife wanting to help but I'm not sure this is a goer as it were

I saw this on that 'can't pay we'll take it away' programme on the tv. They were taking the guarantors processions away. I would absolutely not ever do this in your position.

Your wife really doesn’t seem to understand what this would mean. I would never go guarantor.

Don't do it OP!

Nope!

Lots of landlords take a huge deposit or year's upfront rent instead etc. You'd be infinitely better off telling her that in a year's time you'll contribute to a larger deposit if she can save the rest.

Your wife clearly doesn't understand the implications of what she is suggesting, which is really scary!

I think you should spell it out to her that you are refusing to have any part of any arrangement that could put your own financials at risk.

I wouldn't dream of entertaining this, particularly not for an 18 year old who has never paid a bill before.

This entire enterprise is a disaster waiting to happen.

Have you thought about the damage this would do to your marriage if she defaulted?

Again you need to spell it out to your wife.

I would be cross that she seems so ditzy about something that could cause huge upset in your lives.

Good luck.

Your wife clearly doesn't understand the implications of what she is suggesting, which is really scary!

Exactly. I really don't think your wife understands the full implications of what this all means. It means you are renting this flat.

Don’t do it. She needs to get a job and organise her own accommodation. She can stay with her mum until she can pay her own way.

100% NO

No way would I touch this with a barge pole. Even if I did, I'd want to know her plan for being able to afford the rent - at the very least a job lined up if benefits won't cover rent and living expenses.

I think it's a massive red flag that she's too impatient to go on a waiting list for a council property.

I wouldn't do this! Not a chance in hell.

I've been asked before but respectfully declined. I'm glad because they didn't meet their full rent in the end!

There is no one I'd ever trust enough (to do this for. I say that as someone who used to rent out property and regularly saw people default on their payments.
Life can hit people suddenly iin very unexpected ways.

Any shortfall between benefits and rent can build up quickly. Then if the LL can't get her out until it goes to court and bailiffs attend you are lumped with all the arrears, court and bailiff fees.

Also, thanks to this thread I googled proposal boxes, which I'd never heard of before. And now I blame etsy for all this. It's the new MLM isn't it? Got o hobbycraft, make some stuff out of cardboard and fill it with tissue and pointless crap.

"Oh, I've got my own little business in wedding planning..."
No, you make pointless crap that brides now feel they HAVE to have.

oh dammit.Wrong thread!

@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.

She's 18! Huge responsibillity. Even with her best intentions it will be very difficult.

Not in a million years. I'd be very nervous about being guarantor for my own kids.

Your wife's DN is 18, has had a child, is single, has never had a job, paid a bill, and lives with her mum.
She likes the idea of her own flat and doesn't want to wait for a council one.
I don't know her, and obviously not her full circumstances, but she sounds rather immature and entitled. Maybe not uncommon for 18.

The best thing your wife could do for her is to give her advice about saving up, getting a job, maybe getting some training/further education if that is appropriate. Also, as others have already suggested, sit down with her, and show her how to work out the full costs of getting her own flat. She may be amazed at the long list of everything she currently gets "free" at her mum's house, maybe food, Netflix, broadband etc that she would have to pay for herself if she moved out.

Simply enabling her, dare I say it, rather entitled attitude to a flat, will not help her DN long term.

@Dave20

Ive no idea how long the term is or the rental cost- I just put £750 as an example, sorry should have said that. As I understand it, people try to private rent with housing benefit when they don’t or can’t rent with social housing. I don’t know how housing benefits work or universal credit. She’s single with a baby. I’ve no idea how much she gets in benefits. Or how much she’d get in housing benefits. Would she really have enough to live on in a flat paid for by the government? ( putting aside the guarantor part).

Your wife is very unlikely to be able to guarantee this rent without you. I very briefly toyed with this idea for a family member, and I needed to be earning over £36k to be a guarantor. This was nearly 10 years ago.

What if something happened to you and you were out of work? You’d still be liable for any unpaid rent and associated costs. Being a guarantor will go against you on your credit file and will be taken into account when taking out any loans/mortgages.

Just tell her you’re not doing it.

Just popping my hard no down here.

Just in case you haven’t heard ‘don’t do it’ enough times -
Being a guarantor is an unenviable situation. You take on potentially all of the financial risk, whilst at the same time having no control over the situation.
Whilst the initial tenancy agreement will be for a fixed term of 6 or 12 months, it will thereafter become a periodic tenancy, which renews on a monthly basis.
Your DN could default on the rent, and choose not to leave the property. You would have a choice of paying for her, or not paying and waiting for the landlord to take court action to evict.
As well as being expensive there are very long delays in getting cases to court whilst rent arrears are increasing each month.
Rest assured that even if DN is motivated to ask the local council for help with housing due to impending eviction, their standard advice is not to leave until the bailiffs are due, or she might be treated as ‘intentionally homeless’ meaning they don’t have to help her.
( Strictly speaking they should try to help before this, but even if they would not actually refuse to help her if she left earlier, there is no incentive for her to take that risk).
A non working 18 year old will not be high on any landlord’s desirability list due to potential risk of non payment. That is why a guarantor is required.
Unless her circumstances change there is little likelihood of her being in a position to release you from this commitment , so you could have it for many years.
Really you are in a potentially worse position as a guarantor than by being the original party to the agreement.

Your wife wants to play the saviour on a white horse but she’s being ridiculous when earns £12k pa. this is not something you risk the family home for.

You need to be firm and say there is no way you will agree to this.

You say you couldn't afford to pay the rent if your niece defaults.

So even if you did agree to be the guarantor, why would you put yourself in that position? You'd either have to cut back or get into debt.

The chances of an unemployed teenager on minimal benefits defaulting are high, because benefits wouldn't cover her essentials.

If your DW is determined to do this, you could suggest she increases her working hours so she earns more than £22k so she qualifies and you have more money to pay her niece's rent if she doesn't. If she's not willing (or able to as presumably childcare costs would increase) to do this, then it's another tick in the 'forget about this stupid Idea' column.

Tell your wife to get an additional full-time job so she can be guarantor.

It might put it in perspective for her