Buying your first home is a goal for most, but it can be overwhelming with a lot to consider.. have a read of our simple checklist to keep in mind when buying your first home.
One of the biggest challenges people face in buying a property is not the loan affordability, but the time it takes to try and save the required deposit. This can be particularly difficult if you are having to also pay rent at the same time.
Some of the banks have a product to assist with this called a Family Guarantee Loan. Immediate family members such as a parent or sibling can guarantee the loan and offer equity in their property as additional security. This means that you don’t need to have the desired 20% deposit saved and in some instances can even purchase without having any deposit saved at all.
For those borrowers who have some deposit saved but are falling short of the 20% mark, a Guarantor Loan eliminates the need to pay lenders mortgage insurance, which can potentially save them tens of thousands of dollars.
The guarantee can be released once the loan is 80% of the property value. Getting to this point can come from the borrower paying the loan down, your property value rising, or a mixture of both.
There are some specific requirements around guarantor loans and variances in each bank’s policies, so we do suggest getting in touch with a mortgage broker who can assist you from start to finish.
Watch our short video below from Director Ben Hawley to learn more now.
If you have any questions, we are here to help! Get free expert advice from an Azura Financial broker at a time that suits you.