What is a Guarantor and Do I Need One?

If you’ve ever been told “You just need a guarantor,” it probably didn’t feel as simple as it sounded.

Maybe you’re trying to rent your first place, get a mortgage after a rough patch with credit or move on after a breakup. Suddenly you’re hearing terms like “guarantor mortgage” and “affordability checks” and you’re wondering what’s actually at stake, and for who.

In this guide we’ll look at what is a guarantor, who can be a guarantor, what a guarantor needs to provide, does a guarantor have to be a homeowner, and do you need a guarantor for a mortgage at all. 

We’ll also touch on what happens when things get rocky, and how decisive action can sometimes protect both you and your guarantor.

So, what is a guarantor?

As StepChange puts it, a guarantor is “a third party who ‘guarantees’ a loan, mortgage or rental agreement”.

They’re not just a reference or a character witness, mind you. They’re legally on the hook, meaning that if you fall behind with your rent, loan or mortgage, the landlord or lender can chase your guarantor for the missed payments.

You’ll see guarantors most often with:

• private rentals
• personal loans
• some specialist mortgages

What’s more, guarantors have become more crucial in recent years. With homeownership having ‘collapsed’ among young adults according to the Financial Times, and wages struggling to keep up with the cost of living, younger people need more help to secure a place to live.

For mortgages, the idea’s simple enough. The lender likes you, but your income, deposit or credit history isn’t quite strong enough on its own. A parent, relative or close friend steps in and says, “If they can’t pay, I will.” That extra security can sometimes mean the difference between a “no” and a “yes”.

It can be a brilliant helping hand, especially for younger generations. But it can also cause real strain if nobody’s thought about what happens when life doesn’t go to plan.

Who can be a guarantor?

In theory, almost any adult can be one. In practice, lenders and landlords are picky.

When you ask who can be a guarantor, most will look for someone who’s:

• over 18 (sometimes over 21)
• living in the UK
• earning enough to cover the whole rent or payment if needed
• able to pass a credit check

In real life, guarantors are usually parents or close relatives. That’s not a legal rule, it’s just how it works out. You’re asking someone to put their own finances on the line for you, so it tends to be people who already have a strong relationship with you.

They don’t have to be rich, but they do need to be stable. If they’re already struggling with bills or have a poor credit history, there’s a good chance the landlord or lender will say no.

What does a guarantor need to provide?

If someone agrees to help, the next question’s usually “What does a guarantor need to provide?”

The details vary, but most guarantors will be asked for:

• proof of identity, like a passport or driving licence
• proof of address
• proof of income, such as payslips or tax returns
• permission for a credit check

On top of that, they’ll need to sign a legal agreement that sets out exactly what they’re responsible for, and for how long.

For a rental, that might mean they’re liable for unpaid rent, damage and sometimes legal costs. For a mortgage, it can go further. Some guarantor mortgages use savings or even the guarantor’s own property as security. If that mortgage fails badly enough, their own home or savings could be at risk.

If you’re asking someone to sign that kind of document, give them space to read it properly and get independent advice. It’s not cheeky to suggest that. It’s sensible.

Does a guarantor have to be a homeowner?

This is one of the big questions people worry about.

Strictly speaking, a guarantor doesn’t have to be a homeowner. The law doesn’t say they must own property. If they’re an adult with a solid income and good credit record, they might be acceptable even if they rent.

In the real world, it’s a bit more nuanced.

Plenty of landlords and some lenders prefer guarantors who are homeowners. It makes them feel more confident that the guarantor’s financially stable and has something solid behind them. Some will flat out insist on a UK homeowner as guarantor and won’t budge.

So if you’re wondering does a guarantor have to be a homeowner, the honest answer is:

• legally, no
• practically, quite often yes

But if your chosen guarantor rents, has a very low income or is on a short term contract, you might need a Plan B.

Do you need a guarantor for a mortgage?

Most buyers get a mortgage with no guarantor at all. You’re more likely to be asked about one if:

• you’ve got a low income for the amount you want to borrow
• your credit history’s not great, or you’ve got an IVA
• you’re self-employed or have variable earnings
• you’re buying after a separation or other big life change

In those cases, a guarantor mortgage can sometimes let you:

• borrow a bit more than you’d manage alone
• buy with a smaller deposit
• get approved when a standard application keeps getting knocked back

It’s still a very serious step. If your income drops and you can’t keep up, your guarantor is firmly in the firing line. Missed payments affect both your credit files, not just yours. If things spiral, you’re both caught up in the fallout.

Before you go down that road, it’s worth weighing up other options too, like buying a cheaper property, waiting to build a bigger deposit or clearing existing debts to improve your affordability.

Sometimes “not yet” is kinder on everyone than “yes, but only with a guarantor”.

If it feels like the numbers just won’t work and you’re struggling with repayments, a fast house sale may be the best option for both you and your guarantor.

Move on from guarantor stress with a clean break

So, do you need a guarantor for a mortgage? Not by default, but it’s one option if you’re close to affordability but not quite there.

But what about if you already have a guarantor mortgage, or you’ll need a guarantor in order to remortgage? In that case, selling up can be a better way to draw a line under it. Clearing the balance means you’re not juggling arrears, your guarantor’s not lying awake worrying and you both get to move on.

That’s where we come in. At Sell House Fast, we buy any house, flat or bungalow for cash across the UK, so you can step away from a stressful situation quickly and with confidence.

Here’s what we offer:

• A named contact and a tailored plan, not a call centre script
• No hidden fees, no surprises, you keep all of the proceeds
• We can often complete in a matter of days or to your timescale, so you’re not stuck in limbo
• We use real market data and years of know-how to make fair offers and keep things smooth
• We’re aligned with The Property Ombudsman, so we follow strict rules that protect you

If you’re ready to see what a fresh start could look like for you and your guarantor, get a free, no-obligation cash offer now. Just enter your postcode on our site and we’ll take it from there.