Going Guarantor for Your Kids: What Parents Need to Understand

One arrangement that is becoming increasingly common is a parent acting as guarantor to help their child buy a first property. In effect, the parents use their own property to help the child obtain finance, guaranteeing a portion of the loan the child is taking out.

This is a significant undertaking, as it usually means placing a mortgage over your own property. That makes it a real risk for parents, and one that deserves to be understood properly before you agree to it.

For that reason, it is important to have these conversations early, and to have them with the parents separately from the children, so that the risks to the parents can be talked through openly. Speaking with both your broker and your solicitor at that stage means everyone understands their obligations and the risks involved, and can decide whether the arrangement genuinely works for them.

If you are considering going guarantor for your children, we would encourage you to speak with us first, so that you fully understand what you are taking on.