Mis-sold mortgage claims are hot on the heels of accident claims and payment protection insurance claims and will be much more damaging to the banks and building societies who sold them.
Who Will Benefit? First time home buyers that have poor credit or are just establishing credit will benefit from a family guarantee. A family guarantee may be secured by a spouse, child, parent or sibling. In most instances, grandparents, cousins, aunts or uncles do not qualify as acceptable guarantors. Some banks will accept these family members as guarantors, but not all will accept the loan on a family guarantee.
What are They Used For? Most often family guarantees are used for first time home buyers, vehicle loans and other investment properties. Personal investment loans may also qualify for a family guarantee. Depending upon the needs of the borrowers, family guarantees may be instrumental documents that increase the buying power. With a family guarantor, borrowers can borrow up to 100 percent of the purchase price plus the cost of stamp duty. Lenders feel more confident when buyers are backed by a family guarantor with more assets than the borrower.
The Financial Services Authority or FSA issued a process known as the Mortgage Code of Business in 2004. This set out strict guidelines for the issue of mortgages and all banks, building societies and financial institutions are governed by this code. However, it now looks as though many of them broke some or many of the rules and could be liable for claims from home owners who are being made aware of the problems with such mis-sold mortgages.
The guarantor may supply legal or financial advice to protect their interest and avoid accruing additional debt. The rules and terms of the loan may be outlined on the standard loan application form. A calculation will be made to determine the guarantor’s responsibility percentage. Successful completion of the documents will award the loan to the borrower.
Other questions you should ask yourself – are you now in negative equity because of taking out your current mortgage or perhaps you were advised to switch to a different lender by your financial advisor?
Some of these claims could be quite an expensive process for the already beleaguered banks and financial institutions who are already reeling after the sub-prime fiasco of recent years.
Borrowers should review all of their options to determine what will type of loan will be best in their given situation. The best interest rates and terms will be obtained with the proper type of guarantor. A simple calculation will determine the obligation of the borrower in this situation. Family guarantees are recommended in numerous situations.
Hi readers my name is Harris Smith, thanks for reading this article I hope I will be useful to find home equity line of credit. Debt Consolidation entails taking out one loan to pay off many others.
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