Glossary - Guarantor

Guarantor is a person providing security for finance.
If a buyer cannot borrow enough to buy the property they need then someone can help to pay the rest of the mortgage, or act as security for the remainder of the mortgage.
As a guarantor a person undertakes that they will repay the debt that is incurred by another person. Should a borrower find themselves in difficulty with repayments on debt, then their guarantor would be expected to make the repayments.

Example: First Time Mortgage
A consumer who has their first home is called a first time buyer. First time mortgage packages are available and these products are specifically aimed at the buyers who are new to the property market. First time buyers may find that lenders are not willing to give them a 100% mortgage, this may be due to the increase in house prices. The parents of a buyer can become guarantors on their son or daughters mortgage, first time buyers can get their foot on the property lader by having a guarantor.

Useful Tip
If there is a case of more than one guarantor, then each one will be responsible for the outstanding debt. Understand what you are asking of a guarantor, they will obviously need to trust you and you them before you enter into this sort of agreement.

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