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?

No don't you do it. Where is your DN's DF in all this? Can't he be a guarantor?

If the council list in your area is long they may also offer a rental deposit scheme whereby they work with certain landlords and the council act as guarantor and can provide deposit etc, she may well be eligible as a young single mother but she needs to ask about it.
In your shoes I wouldn't act as guarantor because you can't afford to cover her rent if she falls behind

I'm 100% in agreement with everyone saying no.

To try and help your DW understand, perhaps you do need to spend a bit of time with DN to understand the values involved and benefits to then be more justified in saying no.

Also, even if a simplification of the truth, explain that the reason a house owner is needed is because ultimately if DN couldn't pay for reasons beyond her control (she's lovely, not accusing her of anything etc etc but the benefits may change) then it's the value of YOUR home which would be called upon to settle the debt.

@Lykia

Direct your niece here:

[[https://www.rentguarantor.com]]

This is a company who will guarantee her rent - for a price.

Your Quick Quote The estimated cost for your Rent Guarantor is: £735.00, or from £73.50/month from Payl8r.

for £750 if on benefits

If your DW thinks her niece defaulting will mean she can "come to an arrangement" with the landlord, she is hopelessly naive.

The entire shortfall will be her responsibility, & she will need to pay it in full.

I think you've answered your own question. You don't have the money to be able to pay her rent on top of your own bills.

I'd only consider it if there was an arrangement whereby her housing benefit went directly to the landlord so there would never be a huge bill for you. Currently, it goes to the claimant, so she could easily spend it and leave you liable for the full whack.

But I don't think it's a good idea if you're not very comfortably well off.

I have not read the whole thread but essentially the question you should ask yourself is thus: if you were asked to pay your niece’s rent every month, would you agree?

And to be honest, I have no idea how anyone would think that an 18 year old can afford her own flat?!

I have only ever been a guarantor once: for my brother with whom I am very close, who I know earns a good wage (the need for one was related to him being freelance) and for a rent I knew I could pay myself if I absolutely had to.

He's about the only person in the world I would have entertained it for and in about the only situation I would have done so (good wage, sensible, reliable with a proven track record of always paying bills and debts on time etc).

Is the baby's father not on the scene able to help?

It’s way too risky and will affect your credit rating if she defaults and your DSIL and/or you can’t pay her bills.

Even if she was your own DC, if I were in your position, I wouldn’t be helping her out renting another property until she was fiscally able to provide fully for herself and her DC.
I speak from experience as I have been burned in the past by being an unofficial guarantor (no credit rating reduction, but a large hole in my bank account!)

Why does your wife think the guarantor must be a home owner?
It's so they can put a Leon on your house if the renter defaults and you don't pay!

You already know you can't afford to pay her rent if she doesn't.

So you know that they will come after your house.

The risk is not worth it because you cannot afford to pay if it goes tits up.

Fucking autocorrect. Leon indeed. 🙄

What’s the chances of DW being accepted on her own then? She works part time on 10 k per year?

In this case, from my experience, she wouldn't be accepted as a guarantor.

I've acted as guarantor in the past for my ds. He moved last year after my income dropped and the letting agency told me it was no longer high enough for me to act as guarantor. My income is quite a bit higher than your dw's. DH and I are property owners and I offered joint bank account statements showing healthy income and relatively low outgoings (illustrating that we could afford to pay ds's rent should he default). But because I didn't hit the magic income mark they wouldn't accept me, and DH had to do it (ironic as we only have a joint bank account).

So I think you are probably worrying unnecessarily - unless your DW asks you to act as guarantor?

No chance.
Not in a 100 billion years.

Don't do it. I'm guarantor for my ds. He was absolutely desperate and I refused all along but then stupidly gave in to his begging and pleading. I make him send me his rent money as soon as he gets paid, then I hold it and only send it back to him the day before its due to be paid, to prevent him spending it. It's such a stress and I'll never agree to it again. I know it sounds terrible but I worry that if something were to happen to him and he couldn't earn any money for whatever reason, then it would be my responsibility to pay the rent until the end of his contract. I could do it but it would seriously effect my finances. He even looked into private guarantor schemes but he would have had to pay them a fee of around £600 and he still required a Co signer (me) who would ultimately be responsible for the unpaid rent. I am well aware how stupid I am to have put myself in this position.

@MRSAHILL you should ask son to set up an automatic standing order so the money comes to you automatically each month so you don't have to make him send you the money.

What does the guarantorship end?

Dont do it. Your wife is being blind.
This 18 year old will have to budget for every single cent. She will not manage, but will think, "never mind Rent's covered"
She is not responsable, at least she wasn't 9 months ago

So she is 18 and a single parent, doesn’t work, isn’t used to paying bills or being responsible. She is living off the tax payer who is covering her immature choices.

Wants to get a place of her own...I wouldn’t touch this one with a barge pole.

We were guarantor for our youngest, and ended up with a huge bill. We won’t ever do it again.

I did that for my dd and it worried me so much I swore I would never do it again. Luckily she moved and the next landlord didn’t require.one. I told her then that I wouldn’t be able to do it again.

@Medievalist

What’s the chances of DW being accepted on her own then? She works part time on 10 k per year?

In this case, from my experience, she wouldn't be accepted as a guarantor.

I've acted as guarantor in the past for my ds. He moved last year after my income dropped and the letting agency told me it was no longer high enough for me to act as guarantor. My income is quite a bit higher than your dw's. DH and I are property owners and I offered joint bank account statements showing healthy income and relatively low outgoings (illustrating that we could afford to pay ds's rent should he default). But because I didn't hit the magic income mark they wouldn't accept me, and DH had to do it (ironic as we only have a joint bank account).

So I think you are probably worrying unnecessarily - unless your DW asks you to act as guarantor?

I agree.

I was initially turned down for my dd's guarantor because the letting agency mislaid my dividend certificate so thought I only earned £10k per year. This was despite me and dh owning a mortgage free property with significant savings from the sale of our old property.

I think that many (perhaps most) parents of students have to guarantee the rent as there is no other way of them getting accommodation, usually. However, I've never been asked if I was a homeowner. I know some landlords do but I think the niece has to go with a landlord who will just accept her mother's guarantee even if she is not a homeowner. Alternatively, the mother should lend the niece money to pay a few months rent upfront. After all, she had said she would pay the rent if her daughter fails to so she obviously can afford it.

I’m thinking of saying no anyway, so DW wouldn’t have a choice as she doesn’t earn enough

Very wise of you, OP
Practically everything you've said about her blood family comes down to airy-fairy "Oooo she'll be fine" or "Oooo we could sort it out", and it seems none of them have the money to back this up
No doubt they'd all be very sorry and full of excuses if it all went wrong, but that wouldn't get you off the hook would it?

With guarantors and everything else, wanting isn't the same as getting and I wouldn't touch this with a bargepole

@Dave20 Hope you have talked your wife out of it!

@Dave20 As several posters have said, the vast VAST majority of unemployed 18 year olds do NOT have their own place. Why does your wife's niece think she should be entitled to this, at YOUR expense?

A number of posters have said they would not do it for anyone but their DC. We would not even do it for them. We were in a precarious financial position when our first DC started at uni - almost 10 years ago - and had a low income, and they shared the uni house with 5 others and were jointly and severally liable.

There's no way we could have forked out multiple 1000s of pounds if DC or any of their mates had defaulted. Fortunately, because they were the only one of 6 without a guarantor (a bunch of 6 friends,) the landlady let her in with no guarantor.

Turns out it was a good choice. She got excited at having some money to herself (student loan) and spent frivolously, and ran out of money quickly. She's an intelligent hard working, responsible young woman now, in her late 20s,) and is good with money now, but at 18, she was a bit reckless.

So long story short, 4 months into her degree (by the January,) she'd only paid one month's rent. She was on the phone crying and admitted she had no money left. We told her we weren't paying it as we simply didn't have the money (at the time.) We said 'you need to sort this out with your landlady...'

Luckily, the landlady was a lady with 7 properties that she rented out to students, and although she wanted the money, as it was her business, she was OK to wait a few months, and was very good and very lenient. By July, DD had caught up and was fully paid up!

It taught her a lesson, as we didn't/couldn't bail her out. (Probably wouldn't if we could have!) After that, she became more responsible with money.

Also, if this had been a strict, not so laidback landlord/lady, and we HAD been her guarantor, I have absolutely no doubt whatsover that they'd have been after us for the £1500 our DD owed.

Some posts on here are terrifying, like the poster who said she is a guarantor for someone who's buggared off and left the agreement and she owes six thousand pounds already. And the official agreement hasn't even taken place yet. Could be nine to ten thousand yet.

Even now, (being in a better financial position,) we STILL wouldn't be a guarantor. As has been said, it's basically an open-ended agreement with no limit. By the time someone is evicted and all the court costs/eviction costs etc are added on, you could owe 5 figures (over ten thousand pounds!)

I would rather fork out the first 3 months rent tbh. Which in most cases for uni rooms would be £1250 to £1500 grand for those 3 months, and around £1700 to £1800 for 3 months for many private let homes (in my area anyway.)

I'd rather pay the first 6 months even (maybe £2500 for a university house room,) than be a guarantor.

If you offered the first 3 months, they may not need a guarantor, and if you paid the first 6, they almost definitely won't need one in most cases. Seems like a lot, but at least you know where you stand, and there will be no nasty surprises of ten thousand pounds plus to pay!