Guarantor on equity loans are for those borrowers who may have a negative credit rating. Since the borrower has damaging credit, the lender may ask the homebuyer to agree to a guarantor. In other words, you are agreeing to find a co-signer to back your claims that you can pay the equity loan as agreed.
If you need a co-signer, you must understand that if you fail to meet the payments, then the party co-signing with you must take over the payments. The co-signer has promised the lender that he will pay if you fail; therefore, make sure that you will hold up to your end if applying for equity loans with co-signers.
Guarantors or co-signers are often immediate family members, or close friends. If the co-signer is needed, the lender will consider your income and the co-signers income when factoring in the costs of the loan. Therefore, you will expect higher repayments and interest rates overall. Few lenders will take into consideration your circumstances and seek out lower mortgage repayments and interest rates on your behalf. This is not always the outcome, since many lenders are taking advantage of the
less fortunate.
Note that if you apply for an...
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