Get into your own home sooner with a Family Guarantee
Mortgage Choice - Jody Shadgett
Finance, Car Finance, Investment Loans
If you are struggling to save for a deposit for a home or want to avoid paying LMI (Lenders mortgage insurance) a Family Guarantee loan can help you get into your own home sooner and save thousands of dollars on mortgage insurance. Family guarantees are generally restricted to immediate family such as your parents but there are a lender that have no restrcition on who the guarantors are.
A Family Guarantee loan allows you to use equity in your parent’s property to be used as extra security against your home loan. It is important to make sure you can afford the loan repayments on the loan before considering a family guarantee.
After you have built up enough equity in your home by paying some of your loan down or the increase in value in your property you can have your family guarantee removed.
Benefits of having a Family Guarantee Loan-
You are able to get into your own home with a smaller deposit
Save thousands of dollars on mortgage insurance
There is no gifting of money involved
Family Guarantees no longer require to take the whole property as security – You can set a certain amount eg. 20% of the value of the property being purchased
You are generally able to borrow more as you are not paying mortgage insurance and can borrow up to 100% of the purchase price
Disadvantages of a Family Guarantee Loan –
If you are unable to make repayments on your mortgage, the lender can take legal action against you and your guarantors
Guarantors are liable for the amount specified in the guarantee
Your repayments may be higher as you are borrowing a higher percentage of your purchase price
If your home decreases in value you may be stuck with a mortgage that is higher than what your home is worth, which can make it hard when selling
If you are considering applying for a bank guarantee loan or to find out which banks offer Family Guarantee loans please contact Jody Shadgett on 0447 573 865 or email [email protected]
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