Guarantors are typically mums and dads so it's great that your thinking about the risks involved in using their home as security for your mortgage.
To be clear, guarantors are ultimately liable for your home loan should you default.
However, there is a common misconception that banks move quickly to sell the guarantor’s home in order to recover the remaining debt.
The reality is that banks try everything to solve the problem before taking this drastic decision. The reason is that there is often a significant process and cost involved in trying to sell the guarantor’s home.
Banks will usually opt to reduce your mortgage repayments for a period of time until you're able to get back on your feet.
Should you still not be able to make your home loan repayments, lenders will always take action on your property first before making the guarantor liable for any outstanding debt.
Repossession will only commence if the mortgage has been in arrears for 90-180 days.
For more information please check our risks of being a guarantor
web page and speak to one of our mortgage brokers directly by calling 1300 889 743
or by filling in our online assessment form