Question

This person assists the applicant in obtaining a loan by agreeing to guarantee repayment of the loan in full either by signing the original mortgage or by a separate guarantee agreement; their income is not used to qualify for the loan. This person is in exactly the same position as the borrower and can be called on for repayment or shortfall in exactly the same manner. This person is known as a(n):

a) Appraiser.
b) Mortgagee.
c) Guarantor.
d) Co-owner

Answer 1

A person who guarantees repayment of a loan if the original borrower fails to do so is called a guarantor. This role is separate from collateral, which involves pledging an asset.

Step-by-step explanation:

The individual who assists the applicant in obtaining a loan by agreeing to guarantee repayment of the loan in full either by signing the original mortgage or by a separate guarantee agreement, without their income being used to qualify for the loan, is known as a guarantor. This person is legally bound to repay some or all of the money on a loan if the original borrower does not, putting them in the same position as the borrower regarding responsibility for the debt. In contrast to collateral, which is a separate form of security, the guarantor provides a personal assurance to the lender.