What are the risks when going guarantor for someone?
It is a big financial responsibility which is why it is important to get legal and financial advice so you can make a fully informed decision before becoming a guarantor. If at any time the buyer is unable to make their loan repayments, you will be responsible for any debt owed to the lender (for example the entire loan amount plus interest) or for a limited guarantee it could be just the portion of the loan that is subject to the guarantee. If you are unable to make the repayments, your home may be at risk if it was used as security. It may also affect your credit score if the repayments are not made on time and in full.
Going guarantor could also impact on your ability to sell your own house. Before being able to sell, you’ll need to be removed as guarantor or the loan that was guaranteed must be paid out in full. And if you wish to purchase property yourself, lenders will see that you are a guarantor, and this may impact your eligibility to secure a loan for yourself.