Guarantee to Lender relating to Mortgage Loan

The document titled 'Guarantee to Lender relating to Mortgage Loan' is a legally binding agreement between the guarantor and the lender. It is entered into with the purpose of obtaining a loan from the lender for the borrower. The guarantor agrees to provide a guarantee in respect of the obligations and liabilities of the loan as set out in the schedule to this guarantee.

 

The document begins with an interpretation section, which defines various terms used throughout the guarantee. It provides definitions for terms such as 'additional loan', 'borrower', 'borrower liability', 'business day', 'debt', 'expenses', 'guarantee', 'guarantor liability', 'loan', 'mortgage', 'mortgage conditions', 'other security provider', 'person', and 'property'. These definitions ensure clarity and understanding of the terms used in the guarantee.

 

The guarantee section outlines the guarantor's obligations and responsibilities. It states that the guarantor guarantees the payment of the debt when it becomes due and payable by the borrower. The guarantor agrees to pay the debt immediately upon written demand from the lender. The guarantor's liability under this guarantee is limited to the aggregate of the principal sum of the loan and all interest, fees, commissions, charges, and expenses that have accrued under the agreement.

 

The limit of the guarantor's liability section specifies that the guarantor will not be liable for any additional loan unless the guarantor has given written approval or later agrees to be liable for it. However, the lender may still make the additional loan to the borrower without affecting the guarantor's liability to repay the debt.

 

The lender's claim against the borrower section states that if the borrower becomes bankrupt or enters into an arrangement with creditors, the lender is entitled to make a claim against the borrower's assets for the full amount of the borrower liability, regardless of any part payment made by the guarantor.

 

The document also covers other important provisions such as payments without deduction, change of the lender's organization structure, joint and several liability, evidence of the borrower liability and the guarantor liability, interest on expenses, provision of correct information, notices and demands, other general matters, disclosure of information, unenforceability of certain terms, termination, payment in other currencies, and no rights under contracts for third parties.

 

In conclusion, this guarantee document is crucial for securing a mortgage loan from the lender. It outlines the responsibilities and liabilities of the guarantor and provides clarity on various terms and conditions. It is important for both parties to fully understand and comply with the terms of this guarantee to ensure a smooth loan process.

How to use this document?

1. Understand the purpose: This guarantee is entered into to obtain a loan from the lender for the borrower. It is important to understand the purpose and implications of this guarantee.

2. Familiarize with definitions: The guarantee includes various definitions such as 'additional loan', 'borrower', 'borrower liability', etc. Familiarize yourself with these definitions to ensure clarity.

3. Guarantor's obligations: The guarantor is responsible for guaranteeing the payment of the debt when it becomes due. Understand your obligations and responsibilities as a guarantor.

4. Limit of liability: The guarantor's liability is limited to the principal sum of the loan and accrued interest, fees, charges, and expenses. Be aware of the limit of your liability.

5. Additional loans: The guarantor is not liable for any additional loans unless written approval is given. Understand the implications of additional loans on your liability.

6. Lender's claim against the borrower: If the borrower becomes bankrupt or enters into an arrangement with creditors, the lender can make a claim against the borrower's assets. Understand the lender's rights in such situations.

7. Payments without deduction: Ensure that payments under this guarantee are made without any deduction of sums owed by the lender to the guarantor.

8. Change of lender's organization structure: Changes in the lender's name, constitution, or merger do not affect the guarantor's obligations under this guarantee.

9. Joint and several liability: If there are multiple guarantors, each guarantor is individually responsible for complying with the guarantee.

10. Notices and demands: Any notices or demands must be in writing and served in accordance with the specified methods.

11. Other general matters: Familiarize yourself with other general provisions such as the lender's rights, employment of debt collecting agents, and the lender's ownership of the guarantee.

12. Disclosure of information: Understand the lender's rights to disclose personal and credit information in accordance with data privacy laws.

13. Termination: The guarantor has the right to terminate this guarantee with one month's notice. Understand the implications of termination.

14. Payment in other currencies: Unless agreed otherwise, the guarantor liability must be paid in the original currency. Be aware of the lender's right to convert payments.

15. No rights under contracts for third parties: Understand that only the parties to this guarantee have rights to enforce its terms.

16. Choice of law and jurisdiction: The guarantee is subject to the laws and jurisdiction specified in the document. Understand the applicable law and jurisdiction.

Note: It is recommended to seek independent legal advice before signing this guarantee to fully understand its nature and effect.