Guarantee

In the case of mortgages, a guarantee is a legally binding promise given by someone other than the borrower that they will be responsible for paying the mortgage if the borrower fails to do so.

Guarantor

The person who provides a guarantee.

Higher lending charge

A higher lending charge is normally required by a lender where the loan is over 90% of the purchase price or valuation of the property.

The higher lending charge is the premium payable for insurance which benefits the lender only and is to cover any loss the lender may suffer if it has to enforce the terms of the mortgage and sell the property where the amount received is less than the amount outstanding on the loan. The higher lending charge does not release you from any liability and the insurance company can look to you to repay them any sums paid to the lender to cover any loss or shortfall.