Guarantor Home Loans

 

Guarantor Home Loans are very popular in this day of extremely high property prices, especially in the capital cities of Australia. The most popular use of a guarantor today is usually a parent using the equity in their family home or investment property so that their child or children can buy a home with little or no deposit. Even if the child has $100,000 in cash to put towards their home purchase, if they are buying a home for $1,000,000 then stamp duty alone would be $40,000 in NSW as an example. This would only leave the purchaser with approx $55,000 (after other costs) as a deposit, which is just over 5%.

A 95% LVR lend on a $1,000,000 purchase price would equate to a staggering $48,000 in mortgage Insurance which needs to be added to the loan. By using a Family Guarantor, the borrower would avoid having to pay the Mortgage Insurance as the lender will hold the parents property and the newly purchased property as security. You can also use a guarantor to assist with servicing the loan, but these options are much less popular than the security guarantor.

When writing one of these Guarantor Home Loans is very important that the loan is structured correctly – we specialise is this type of loan scenario so if you are considering a Guarantor Home Loans then please contact us and we will take care of the whole process for you.