But remember, not all lenders are created equal. Your guarantor can be a self-financed retiree, or even with the pension (if you are over 65), provided you get legal advice before signing the loan offer and present a sound exit strategy to the lender. The short answer to this question is that yes, a pensioner or a retiree can be guarantors of a rental agreement or a mortgage. However, not all lenders evaluate guarantors on that basis.
Some of our lenders can accept retired guarantors, pensioners or other self-financed retirees for 65 years. As long as retired parents seek independent legal advice before signing the loan offer, some of our lenders may allow them to act as guarantors. Yes, we can accept a retired guarantor as long as you are between 18 and 75 years old and have not had problems paying bills in the past. Although you don't have to own a home, you can increase the chance that we will accept you as guarantors if you own your own home.
When selecting a guarantor, you should choose someone you can trust and someone who trusts you in return. Guarantor loans offer several benefits to borrowers, depending on their financial objectives and current circumstances. You don't have to be a particularly wealthy person, you just need to have the financial means to cover your payments if you can't. However, the rules about who can be a guarantor and how guarantors are evaluated can change from lender to lender.
Noel Whittaker is the author of Making Money Made Simple and many other books on personal finance. As guarantors are only required to pay the amount they agreed to guarantee, once they pay that amount, they are no longer obliged to assume any other liability. His bank declined his loan application as they didn't want to risk accepting a retiree as a guarantor. Rather, if the borrower has problems with the repayment of the loan and reaches a stage where the lender needs to recover the funds, the lender can and is entitled to recover the amount of the guarantee from the guarantor.
When you use a guarantor loan to avoid paying LMI instead of saving a deposit, the mortgage could end up costing you more in the end.
