To not be a guarantor for my sister

[PinkShimmerSparkle]

Even though this means they and their 3 children might become homeless.
My DSis and her DH are not fantastic with money, I always assumed that they made sure that bills, mortgage etc were paid and all their nights out and their regular purchases of new technology, holidays etc were bought from disposable income but in hindsight it is obvious that they were always spending beyond their means, this is none of my business and I absolutely would never get involved or say anything.
They have both been working until recently when her DH left his job, she tells me that they have missed one mortgage payment and have now been issued an eviction notice.
They are looking at renting but everything requires a guarantor and she has asked me and DH to be one, as she knows we both earn and can save every month, but this is only because we are careful with what we spend.
I have said no but feel bad that they might become homeless.
AIBU?

Oh we'd just moved back from abroad and initially got temp jobs before we moved into permanent roles which was why we needed a guarantor for rent. Completely understand why my father looked at the rent agreement a bit hesitantly before he signed.

@PinkShimmerSparkle it really doesn't sound like a good idea to vouchsafe for a mortgage and not sure they're being clear with you. Talk to her.

So also saying goodbye to three months rental money? Yeah, sounds like a plan 'cos they're SUCH responsible people....🙄

@PinkShimmerSparkle

Firstly, she is LYING!

No mortgage company issues an eviction after ONE missed mortgage payment. She clearly thinks you were born yesterday!

Mortgage companies won't usually take action unless at least 3 payments have been missed, and then they won't evict - they will attempt to set up a payment plan.

Secondly, do NOT even consider being a guarantor for her! Especially as she clearly isn't being honest with you about their finances.

Do they not have any equity in their home?

In the current climate it would only be going to eviction status after a year - 18 months so she is definitely not telling the truth. Nevertheless and no matter what please don’t become a guarantor. It won’t end well for you.

Yes you can be evicted as a home owner if you're not paying your mortgage but not after just 1 missed payment. It will take a few months before they can evict you.

Maybe if it were me I would try to make some excuse to soften the blow.

Why?

Something is not right here!

As someone who has had guarantors (family members) for renting, you've made the right decision, OP. Honesty, trust and reliability are essential in such a dynamic.
I wouldn't dream of leaving my family members in the shit and they know this.

If they have to sell their home surely they get some money from this...then this can be put towards advance rent thus not needing a guarantee... it seems like they haven't been keeping up to date and got themselves in a pickle. Which unless you loaded even a grand or two won't really help.... they need to get proper financial advice if it was my sister I would offer to help by making appointment going with her etc you can help in other ways that's more beneficial than money long term xx

She is lying to you , she wouldn’t get evicted for missing one mortgage payment . I would imagine that they are in significant arrears
If you don’t want to or can’t afford to bail her out then tell her that you couldn’t afford to cover her rent arrears if they defaulted again which means you would not be a suitable guarantor.

I would never be a guarantor for anyone except our kids for their student housing.

You may end up on the hook not only for missed payments but also interest/charges/legal fees/debt collection fees.

If you choose to help anyone it's better to make a direct payment to the lender or whoever (just don't expect it ever to be repaid and decide if that's ok for you).

I'll echo what others have said, never be a guarantor.

And the mortgage, the lender would, as others and your friend have said, only go for re-possession as the last resort - they have to go to court for a reposession, process takes months, so they must be hopelessly behind, made no attempt to address the situation or come to an arrangement.

I'm afraid you will end up in the poop yourself if you sign as guarantor.

If they are getting evicted by the bank, it will be the bank selling the home. There is also no guarantee there is any equity in the house aswell and the house may be sold for less or similar to the mortgage amount, the bank won't be looking to make a profit just get their money back. Any shortfalls after the house is sold the sister would still be liable for.

Because I value my relationships with some people, even if I'm not impressed by the way they run their finances.

The trouble with being a guarantor is that you end up for other people's debts. You are wise to say no.

If it was just my sister I would but if a DH is involved then no way. He doesn't care if you end up paying the rent.

Well, anyone who is happy to sub the feckless on the grounds of maintaining a purely one-way worthless relationship is welcome to crack on.

Well done your DH! And well done you for hanging back.

My sister was a guarantor for a loan her daughter took out (no doubt to cover other debts). Suffice to say my sister paid back the whole loan as daughter reneged on every single payment.

Given what you say about your own finances I'd be surprised if you were approved as a guarantor anyway... as I understand it, your income would need to be sufficient to cover your own costs and their rent.
Just say sorry, you can't afford it.

How do you know the relationship is worthless or one way, or will continue to be in the future ?

There are more qualities and aspects to the relationships I have with people than just how good they are at juggling money.

I wouldn't "sub the feckless" but neither would I be abrupt in the way I refused help either.

I have relationships with people who I consider financially imprudent but I know I am going to have to work together with in the future to resolve various issues - keeping that relationship well maintained to me has value. Pissing it away for the somewhat dubious benefit of being abrupt doesn't.

Please don’t do it .

You don't get an eviction notice from missing one mortgage payment - it is a v long road to get to that point.

No no no. We where a guarantor for rent for DHs brother. His wife left him. He stopped paying the rent. They didn't pursue him for it and we ended up in court and lumbered with the debt

Tell them you can't, you love her but won't tie yourself financially to her.
Either that or tell her you've got a bad credit rating so can't help. Suggest she goes to citizen advice

I think mostmortgage companies will try to connect with defaulters to work out a way to keep the agreement alive, especially if the mortgage holders are normally good payers, clearly this has not been the case here which begs the question why, and I bet the answer doesn’t involve a single missed payment.