A family guarantor loan involves a family member guaranteeing part of your loan, reducing lender risk. Here’s how it works:
Who Can Be a Guarantor:
Typically, parents or close relatives can act as guarantors. By using their property as additional security, they help you secure a loan with more favorable terms. For more details, visit our First Home Buyers guide.
Typically, parents or close relatives can act as guarantors. By using their property as additional security, they help you secure a loan with more favorable terms. For more details, visit our First Home Buyers guide.
Responsibilities:
Guarantors may need to cover repayments if you default on the loan. This means they are taking on significant financial responsibility, and it’s crucial that both parties understand the implications. For a deeper understanding of the responsibilities involved, check out our Home Loans page.
Guarantors may need to cover repayments if you default on the loan. This means they are taking on significant financial responsibility, and it’s crucial that both parties understand the implications. For a deeper understanding of the responsibilities involved, check out our Home Loans page.
Benefits:
- Lower Deposit Requirements: With a guarantor, you may be able to secure a loan with a smaller deposit, making it easier to enter the property market.
- Potential to Avoid Lenders Mortgage Insurance (LMI): By reducing the lender’s risk, a guarantor can help you avoid the additional cost of LMI. For more information on the benefits, visit our Second Home Buyer page.
Ensure both parties understand the risks involved. Your mortgage broker can provide detailed guidance to help you navigate this process effectively.
Using SMSF for Your Deposit:
Family (or others) can invest their super into a fund with the direct result of funding your deposit. As of June 2024, this provided the super investment with a 3.5% return, and the borrower paid 5.5%. Servicing would need to be evident, but this innovative approach could be the key to unlocking your property dreams. For more insights on using SMSF for property investments, visit our Self-Managed Super Fund Borrowing page.
#buyinvestlive
Family (or others) can invest their super into a fund with the direct result of funding your deposit. As of June 2024, this provided the super investment with a 3.5% return, and the borrower paid 5.5%. Servicing would need to be evident, but this innovative approach could be the key to unlocking your property dreams. For more insights on using SMSF for property investments, visit our Self-Managed Super Fund Borrowing page.
#buyinvestlive
