What should you know before you endorse?

At Inmobiliaria Espígul we want you to have all the information and be clear about all the key points before taking the big step.

The most important thing is that there is no default, so a guarantee is synonymous with security. In the event of non-payment by the holder of the loan, the guarantor must take charge of the payment of his present and future assets until the debt is settled.

You should know that there are two different types of guarantee:

• The personal guarantee: The personal guarantee consists of a person who assumes the payment of the debt in case the guaranteed person cannot pay it.

• Bank guarantee: The bank is in charge of the guarantee and it acts as the guarantor in case the guaranteed person cannot pay the debt. What is usually done is that the guaranteed person pays a monthly fee to the bank for the guarantee to cover the default. 

Who can guarantee a loan?

Any person who meets the following requirements may be a good candidate to guarantee:

• Have a stable income. Any source of money that allows the guarantor to meet the payment quotas if necessary.
• No outstanding debt. As long as the bank accepts the guarantee, it must not have any outstanding payments such as a loan or own mortgage. 
• Own assets. In the event that the person has their own fully paid-up assets, this is a sure guarantee to be able to face possible non-payment. 

If you are thinking of endorsing a family member or friend, or you yourself need an endorsement and do not know what this entails, these are some of the points to bear in mind:

Consider the option of guaranteeing only if you know you can afford the possible debts.

If you are thinking of becoming a guarantor, or asking someone else to do so, you need to be informed of the risks involved (it’s like asking for a loan or mortgage but with no benefits). That’s why it’s very important to know all the details and information that the loan requires.

Commitment is the basis. For both parties.

To ensure that the guaranteed person has the solvency to face all the payments and that it is only for extreme cases that the guarantee must be used. The commitment is very important in order to avoid future problems in the event of non-payment. 

Being sure of the decision you are going to make is surely the most important thing. Read all contracts, especially the small print. Take into account the conditions required and evaluate the pros and cons of the decision before making it.

At Inmobiliaria Espígul we have more than 30 years of experience in the real estate sector. We are your trusted real estate agency in Girona to find the home of your dreams and to help you through the whole process of searching and dealing with the purchase of a new home.

If you have any doubt about the endorsement process or any other procedure about buying or selling a property, do not hesitate to contact us at hola@espigul.com or call us at 972 220 110.