Purchasing a property is a significant financial investment, and it often takes years of saving to accumulate the necessary funds. However, with the help of a guarantor, you can expedite the process and become a homeowner sooner than you thought possible.
A guarantor is someone who agrees to take responsibility for your mortgage payments if you are unable to make them yourself. This person is typically a family member or close friend who has a good credit score and is willing to put their own assets on the line for your benefit. By having a guarantor, you can increase your borrowing power and potentially qualify for a larger loan than you would on your own.
Here are some ways a guarantor can help you buy your property sooner:
- Lower deposit requirements: With a guarantor, you may be able to secure a home loan with a smaller deposit. This is because the lender sees the guarantor as an additional security measure, reducing their risk and allowing them to offer more favorable terms.
- Improved creditworthiness: If you have a limited credit history or poor credit score, a guarantor can help boost your creditworthiness in the eyes of lenders. This can increase your chances of being approved for a loan and getting a better interest rate.
- Faster approval process: By having a guarantor, you can speed up the approval process for your home loan. This is because the lender has an extra layer of security and is more likely to view your application favorably.
- More favorable loan terms: With a guarantor, you may be able to negotiate more favorable loan terms such as lower interest rates or longer repayment periods. This can help you save money in the long run and make your monthly mortgage payments more manageable.