What is required of a guarantor?

Bank guarantee

ShareMortgage loans are the preferred instrument for financing the purchase of real estate. When a person goes to a financial institution to request a loan and the institution considers that granting the loan will be a risk, the possibility of presenting a guarantor is often considered. Thus, the figure of the guarantor is usually associated with mortgage contracts, but we also see it in real estate rental contracts.

The guarantor, therefore, is a person with a proven solvency and level of assets who guarantees with his signature the fulfillment of the obligations of the debtor or “guarantor”. If you are thinking of getting a guarantor or acting as such, you may have doubts as to the scope of this figure and the types of guarantor that exist.

When the guarantor signs his commitment as a personal guarantor, in case the debtor fails to comply with his obligations, the guarantor will respond to the financial institution with all his present and future assets.

Up to what age you can be a guarantor

In our country a frequent practice is to act as a guarantor of someone, because for various reasons we feel committed to help in this way. However, this action that is in good faith is one of the main reasons that negatively affect our credit history, either in the Credit Circle https://www.circulodecredito.com.mx/ or in the Credit Bureau https://www.burodecredito.com.mx/ , because it does not depend on us to pay in time and form the acquired debt but we do have to answer for it. So before you embark on doing someone a big favor, do it to yourself first and find out everything you need to know before you become a guarantor.

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When someone is in financial distress and applies for a personal loan or financing, many times a requirement to receive the loan is to have a guarantor. A guarantor is actually a joint debtor, that is, the debt becomes also yours and therefore, if in any case the holder stops paying, it will be your responsibility as guarantor to pay both the outstanding payments and the accrued interest. For many people saying no is almost impossible and even more so in this type of situation, but you must be aware that when you become a guarantor you are accepting a great long-term responsibility from which it is not so easy to get out, since it does not really depend on you that the debt is covered as it should, but it does depend on you that it is settled.

To be a guarantor you need to sign

Loan guarantors are usually joint and several, which means that the guarantor assumes the same obligations as the loan holder in the event of default. In fact, being a joint and several guarantor means that we cannot demand that the bank claims the debt holder before claiming from us.

In case of non-payment of the holder of the loan, if the guarantor cannot pay either, he/she will also be included in the list of defaulters (RAI, ASNEF), and if the non-payment is prolonged over time, the guarantor may be seized.

The guarantor can be partial; that is to say, the bank can accept to guarantee, for example, what exceeds 80% of the appraised value. Let’s take an example: my brother buys a 100,000 € apartment and he is granted a mortgage of the same amount in exchange for a partial guarantee from me. In this case, this guarantee is for €20,000 (i.e. 20% of the €100,000); as soon as the holder of the loan owes less than 80%, the guarantor will disappear.

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How to make a personal guarantee

If you want some of the best real estate credit brokers to analyze the possibilities you have to get the best mortgage, with and without guarantors, do not hesitate to fill in the following form without obligation:

To both questions we are going to answer below. If you have more questions about mortgages and personal finance, do not hesitate to ask our experts free of charge in our mortgage forum.

If you have a large stable income, you are a relatively good candidate. A guarantor who is unemployed or on temporary contracts (or self-employed) is the worst candidate and will certainly not be of any help in getting the mortgage approved.

In any case, if the guarantor wants to buy a house in the future, he/she should know that it will be more difficult to get a loan because he/she is in the CIRBE as a guarantor, in the indirect risk section.

Sometimes it is possible that a family friend accepts to guarantee the purchase of a house, but pretends that the guarantee is only his or her salary or professional or business income. Based on this claim, he/she refuses to provide copies of the deeds of his/her properties or any other type of asset information.

What is required of a guarantor?
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