Whether you are a family member just trying to help or a borrower looking for assistance. It is important that you know the facts around family guarantee loans.
- The borrower is solely responsible for making repayments on the loan.
- The guarantee is only called upon, if the borrower goes into default or sells the property, without being able to clear the debt in full.
- The guarantee can be removed once the borrowers are in a position to stand alone on the transaction. This can be from uplift in property value or reduction in debt.
- A guarantee can be safer than a gift, should the borrowers go through a separation in future.
- Any savings held by the borrower can be placed in offset to save on repayments and accelerate the removal of the guarantee.
If you are considering a family guarantee loan, then it is always best to discuss all parties positions openly with your lending specialist. If you have any questions or would like to know more, please contact Avenyou today.