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Should I Get A Guarantor For A 90 - 100% Mortgage?

Contributor:

Question:

I made some silly decisions as a student and I am paying of the National Bank to the tune of 10K through Baycorp.

I am recently engaged to a awesome lady - a lawyer with a great credit rating and no debt. If we get married will my situation effect her? She has a father willing to go guarantor should we want to buy a house - what should I do? I earn 90K per year and she earns 80K...

Answer:

Assuming your 'silly decisions' are all a thing of the past, your adverse credit rating won't affect your wife to be -- beyond it being a factor that banks will consider, when you make joint credit applications. 

In some cases, where one half of a couple has a bad credit history, it can be easier for the person with a clean history to obtain finance by themselves, rather than make a joint application.  However, given your income that's unlikely to be the situation in your case.

You should only take up the offer of a loan guarantor if the bank absolutely insists on it.  The guarantee would only cover the new debt and of course would never be an issue for your future father in law, except in the event that you defaulted on loan repayments.

 

The advice provided is of a general nature, and guide2.co.nz is not responsible for any loss that any reader may suffer from following that advice.     

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