Choose between providing personal or real guarantees to support a mortgage can avoid surprises when to sell a property.
During the last decade has seen a boom in the sale of housing. The mortgage loan has been, in most cases, the instrument used for financing the acquisition of a property and, in many situations, buyers need a financial support guaranteeing payment of all and each of the shares of mortgage credit.
The figure of the guarantor becomes very important and it became almost imperative for young people, workers with small payrolls, mortgage applicants in excess of 80% of the valuation of the floor or people without a steady job. Many of those who, in turn, signed as guarantors of their relatives or friends may now wonder whether to sell their property or whether, on the contrary, their status as guarantors of a loan of not holding them from freely available of their heritage. The choice between providing personal or real guarantees to support a mortgage may be the key to being able to sell property.
Personal guarantee
Often the figure is often confused with that of guarantor “no debtor mortgagee, so it is important to differentiate the two terms and learn what each means before making a decision to support a mortgage.
The guarantor meets all present and future heritage of debt owed by the holder of the mortgage. That is, personally guarantees that the borrower will meet the payment of contributions, but he does a particular good. It is not uncommon to hear conversations in which ensures that parents have supported their son “to the floor,” but these claims are not entirely correct, which I support with all its assets: its payroll, your checking account, your home. In the event that the owner does not pay the bills, the bank can go directly against the assets of the guarantor.
But not having a specific asset that has served as a guarantee of payment, the guarantor may freely sell its assets and dispose of it in a way it deems most appropriate, it will continue to respond to the new goods. So if you want to sell their home can do so freely, as there is no load on it specifically. That yes, the guarantor’s reduced ability to borrow in the future so if you need a consumer credit or mortgage will not be so easy to get except to respond to your estate before any debts of a third.
If the future guarantor, before backing the borrower, provided that at one point may have to sell your house to buy a new one, by geographical mobility needs or any other reason, it is best to choose the option to use the personal guarantee, because with it has more leeway when it comes to managing their assets.
Collateral
The situation is quite different when the guarantee is used to support the purchase of another house is actually consists of tangible assets and not personal. In this case, the guarantor provides the security for the mortgage payment a specific property and its liability is exhausted with her. It endangers all present and future wealth but only a specific asset such as a building. It is one of the options used when the guarantor does not want to risk all their properties, preferring to have limited liability.
With this kind of guarantee the following possibilities arise:
- That the property used to secure the payment of the mortgage owned by the borrower, ie the person who requests and receives the money to purchase a new home.
- That person uses your home to secure payment of fees by a third party. The latter is the case the mortgagee is not liable, the person without holding the credit puts his own property as collateral for the applicant being granted a mortgage. If given the fact that the borrower does not pay dues on time or fails to definitely pay the bills, the debtor does not respond with mortgagee your home and to the limit has been established. For example, if the bank grants a mortgage to a couple for 80% of the value of an apartment and you need is a hundred percent, parents, other relatives or friends, are a mortgage for 20% value on a property, so that their liability is exhausted by this percentage if the owner does not pay. Thus, only responsible to the extent that the property is mortgaged.
- To secure a debt with a particular property, in this case with a house, the property must be registered in the Land Registry in the name of the person who will use the apartment as collateral. Usually it should be the sole owner or agree with the other owners to put the house up as collateral for payment of a mortgage. Banks are also asking that the property is free of other charges for housing may be used as collateral. Once the guarantor has a mortgage on your property, this charge is reflected in the property registry. As the guarantor of future borrowing capacity is reduced.
- What happens then when the mortgagee debtor not want to sell the property? Legally you can, but it weighs on an obligation and if someone wanted to purchase property you would charge included. Since these data appear in the Property Registry, it is very difficult for the buyer agrees to take shelter in these conditions, so that it is customary to call for debt cancellation. If more and more difficult to sell a home, when it weighs a mortgage on the operation may become impossible.
