Confused about student housing and guarantor

[Back20]

My DD is about to start uni in September. I’ve just found out about needing to be a guarantor 😱. My fixed term mortgage will come to an end next year, so will need to refinance. I’m also needing to move house in next 2-3 years. How does this work if I’m already responsible for her payments. Her degree is 5 years.

They will do a credit check on you to see if your financial situation is suitable for you to take on being a guarantor. This is how it works AFAIK. Then taking this on might affect your future entitlement to loans.

Shouldn’t affect your ability to remortgage. All the guarantor cares about is having someone else to sue, with the ability to pay (regardless of whether it causes hardship) if your dd doesn’t pay the rent.

Thanks both. Bit of a worry then 😱. What happens when my DS wants to go next year? Might (just) get approved for one, can’t see me getting approved for both.
What happens if I get rejected?

There’s no hard credit search involved so you won’t get rejected. Whether you’re a guarantor or not isn’t listed with any of the credit reference agencies, nor any central register of guarantors. They’ll check on the electoral role whether you live where you say, check if you’re a home owner or not, and may ask for proof that you’re employed and your salary.

I remortgaged house a couple of years ago for divorce. So there’s very little equity. That’s when I took the fixed interest rate which ends next year. I won’t be able to refinance at that point due to increased interest fees, random mortgage fees and affordability.
tbh I thought the student loan was for the accommodation, so didn’t know about the guarantor requirement.
thanks everyone for information.
None of this was mentioned at the numerous student finance for parents lectures I’ve been to .

The student loan is to pay for accomodation but the guarantee is so that someone will pay off the student doesn’t.

Think of it like an insurance policy for the landlord, if the student fails to pay it means that they can try to recover the .money from tbe guarantor. Make sure your DC fully understand that they need to pay thier rent, and that they know how to budget their student loans.

The maintenance loan is means tested based on household income. Ds gets the minimum amount which is £4915 for this last year and his accommodation cost was £8770. Doesn't quite cover it. We are on the hook for the whole thing. The agreement we had with our children was the whole loan pays their accommodation, we top up the difference and we then give them a weekly allowance to cover food, laundry, Amazon Prime, Netflix etc.

OP it is standard for university housing and the one thing you need him to understand is that he is signing a legal contract with the university. It is important that he understands this because in second year he will either be in private halls of residence or a shared house. The tenancy agreements are legally binding as he is over 18. He cannot just change his mind about where he is living so make sure you both read the full tenancy agreement before he signs it.

I’m very sure DD will pay. It’s getting past the credit checks that’s a worry especially if it then shows when I’m remortgaging

It won’t show - there’s no loan or financial product being provided. Simply an agreement that that landlord can use to take you to court should your dc and you fail to pay the rent.

You/dc should also be aware of the new renter rights act - a tenancy with others (ie a house share) can be severed by just one tenant giving two months notice. So pick house mates that aren’t going to drop out!

You can be a guarantee even if you rent. My DH is guarantee for my dd and he doesn't have a mortgage or anything as lives in my house and is self employed ( the only reason he done it and not me was because I never had a upto date passport and I don't drive)
Sometimes the uni can advise if you do get rejected to be guarantee

When my son was at uni the guarantor was for the whole house not just your young person. Technically then if any of them defaulted you could be liable. He was in a house share of 6 so it felt like a risk tbh and not sure it’s very fair

I was going to say this, it's pretty standard practice, was when I was in uni nearly 2 decades ago and still frequently see it being mentioned on threads here. Really don't agree with it, there are so many issues.

@Back20 if your DD is only about to go into first year, then the accommodation for which you are being asked to be a guarantor is presumably a room in a hall of residence (owned and run by the university / a hall contracted to the university but run by an outside organisation e.g. Unite Students / a room in a hall where all rooms available to any full-time student)? In that case, you certainly won't be guaranteeing the rent of anyone other than your own DD. That only becomes a potential issue once she moves out into private accommodation (and then only if she is part of a group renting a whole property together, not where the set-up is rooms rented individually with use of shared areas, although the latter is a more common arrangement for non-students).

Out of curiosity - since this comes up as a big thing on every thread about being asked to be a guarantor - does anyone have actual statistics with regard to the incidence of landlords / agents immediately 'going after' random (or specific) guarantors of the non-defaulting tenants in a joint tenancy arrangement, in preference to pursuing the named guarantor for the tenant who has defaulted?