Your property questions answered
Bank suggests that we guarantee our son's mortgage
Q Our son and his partner had their mortgage approval withdrawn when the approval period ran out. The bank now says it might approve them for a 92 per cent instead of a 98 per cent mortgage and they have approached my husband and I to go guarantor in their new mortgage application to make up the shortfall in the money. They will be able to meet the mortgage repayments so it will have no real impact on us. We helped our other son on the property ladder with our SSIAs (which he is paying back) so are keen to help this boy but are nervous about it. Any advice?
A Going guarantor on a mortgage is a very different proposition to simply loaning someone money for a deposit. If for some reason, such as rising interest rates or unemployment, your son and his partner default on the mortgage, you will find yourself responsible for it. Usually, the way out of that would be to sell up quickly but in a market where property is taking longer to sell, this could have very serious financial consequences for you.
Also, you won't be going guarantor for the shortfall, which might be a relatively small sum, you could be legally responsible for the entire amount. What if your son and his partner split up? He is unlikely to be able to afford the mortgage on his own and so what happens then? Could you afford that?
Also has your son actually looked into the guarantor option? Lenders in this new financial environment are increasingly conservative about guarantors and assess them (it's not enough, for example, that you are a homeowner) and you could find that you don't qualify on the grounds of age, income or assets .
This is as much a legal matter as a financial one, so before you do anything, get advice from your solicitor who will go through the implications.
You shouldn't put your own financial security, in jeopardy to help your son. Maybe you could encourage your other son to pay back the SSIA-funded loan faster and give this to your son.
Why do houses on market have no "For Sale" sign?
Q A house in our estate has been for sale for much of the past year. Our neighbours took the "For Sale" sign down this July, but I noticed, when looking at myhome.ie, that the house is still on the market. While browsing I also noticed that another house is also for sale, and this doesn't have a sign either. Is this a new trend in Dublin?
A If the house was for sale for the best part of a year then it's almost certain the owners simply got tired of looking at it and, with the advice of the agent, simply took it down for a while. There was very little activity in the housing market this summer anyway. But you can expect to see the sign going back up this month - agents consider the "For Sale" board a key marketing tool. As for the other house with no sign, this is not unusual. It is likely that the owners wanted to put the house on the market in the summer but the agent advised not actively selling it until September. Expect to see the sign appear soon.
Your questions
Send your queries to Property questions, The Irish Times, 24-28 Tara Street, Dublin 2 or email propertyquestions@irish-times.ie. Unfortunately it is not possible to respond to all questions. The above is a representative sample of queries received. This column is a readers' service and is not intended to replace professional advice. No individual correspondence will be entered into.
