Going guarantor

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afish
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Joined: Mon Jun 15, 2009 4:46 pm

Going guarantor

Postby afish » Wed Jun 17, 2009 6:17 pm

Seeking advice about going guarantor for a home loan.
Specifically what are the limitations on selling the property that the guarantor owns?

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Otto Dargan
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Re: Going guarantor

Postby Otto Dargan » Thu Jun 18, 2009 8:38 am

If you sell the guarantor's property then the guarantee needs to be removed or replaced. So if there will be cash left over then sometimes you can put this as a term deposit with the lender and they will accept it as security. Alternatively if you owe 90% or less of the property value then you may be able to pay LMI and refinance to a normal loan. Otherwise some of the proceeds from the sale can be used to reduce the debt, although this isn't very fair considering it is the borrowers debt not the guarantors.
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