Here at Derwent Finance we get asked daily what the benefits and Risk are of having/being a Guarantor; so, we have listed some of them below.
Benefits-
- Borrows may be eligible to borrow 100% of the purchase price
- Borrows with a guarantor may be eligible to avoid Lenders Mortgage Insurance (LMI)
- Competitive interest rates
- Ability to borrow more than the value of the home to break that down, (that is 100% of the purchase price plus the cost for Stamp Duty and Legal Fees)
Risks-
- As the guarantor, you are required to undergo a credit check and fill out similar masses of paperwork that those applying for the loan do
- If the borrower cannot pay the loan, the repayments are your responsibility
- Being a Guarantor may affect you in the future if you are wishing to get a loan yourself.
