What are the risks?
While becoming a guarantor can seem like the right thing to do for your loved ones, you need to fully understand the risks involved before signing up.
As a guarantor, you effectively offer to take on responsibility for the home loan if repayments can't be met. So, it pays to consider how you would cope financially if the unexpected happens, and the lender turns to you to make good on the loan. Your own financial well-being could be compromised - at worst, you could risk losing your own home.
It is also important to note your own ability to borrow will be reduced after you have agreed to act, so consider carefully your future plans and finance options.