Points To Consider Before Becoming A Mortgage Loan Guarantor

Individuals who fail to fulfil the loan against property eligibility criteria can choose a guarantor to get funds by mortgaging a property from the lending institutions.

In case of a default in repayment of the loan, the mortgage loan guarantor has to take up the responsibility to pay off on behalf of the primary borrower.

Hence, an individual planning to become a loan guarantor must keep in mind several things before agreeing.

Things to keep in mind before becoming a property loan guarantor

Individuals must consider the following factors before saying yes to this long-term financial responsibility:

• A mortgage loan guarantor is not the same as a co-borrower. The responsibilities of a guarantor come to play only when the primary borrower and co-borrower have failed to repay the loan on time.
• It is difficult to withdraw from the responsibilities as a guarantor after agreeing to become the same. If an individual wants to withdraw as a loan guarantor, they have to seek approval from the financial institution as well as the borrower.
• A considerably high CIBIL score and a good repayment history is required to become a loan against property guarantor.
• In case of discrepancies in repaying the loan amount, the guarantor might face legal action. Further, financial institutions have the right to liquidate the property.

Therefore, a candidate looking forward to becoming a mortgage loan guarantor should consider the pointers mentioned above. This will help them make an informed decision as it comes with several duties and responsibilities.

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