What does a guarantor do in the context of a mortgage?

A guarantor in the context of a mortgage plays a crucial role by providing a guarantee for the loan's repayment without being directly responsible for the borrower’s qualifications based on their income. This means that the guarantor agrees to repay the mortgage should the primary borrower default on the loan.

This is particularly significant in scenarios where the borrower may have insufficient credit history or income to secure a mortgage on their own. The presence of a guarantor can give lenders added assurance, potentially allowing the borrower to obtain a loan they might otherwise be unable to acquire.

While the other options reference important roles in the mortgage process, they do not accurately define what a guarantor does. For instance, providing collateral typically refers to securing the loan with property or other assets. Funding the loan would be the primary lender’s role, while holding legal title pertains to ownership of the property, which is distinct from the responsibilities of a guarantor. Thus, the correct understanding of a guarantor's function significantly aids in grasping the overall mortgage framework.