Your First Home
As housing prices have increased, younger people are finding it more difficult to buy their first home. In recognition of this many lenders have introduced new loan products to make it easier to buy a first home.
A significant advancement in recent years is “limited guarantees”. This involves family assistance that enables a close relative to provide a security guarantee on the purchase of a home.
A limited guarantee is just that…
a guarantee limited to a
certain amount.
So how does it work?
Let’s say you want to buy your first home for $500,000 and have savings of $25,000 but don't want to pay around $17,000 in mortgage insurance. Let’s also say that Mum and Dad have offered you some assistance and they own or have sufficient equity in their own property to support a limited guarantee.
Here’s what can happen:
Under this scenario the purchasers now have a loan to value ratio of less than 80% which has saved them around $17,000 in mortgage insurance and probably years in rent. The loan can even be split into the main loan and the guaranteed loan. You can even have a shorter term for the guaranteed loan to get Mum and Dad out of the picture quicker.
While the example given here is based on
having savings of $25,000 the overall scenario
can also work with no savings.
Now everyone’s family circumstances are different so this scenario will not suit all families, however, for those that it does suit it’s a great way for Mum and Dad to help out without actually having to dig into their cash resources. To find out more about how this type of facility can help you (or your children) register below for a free review or give us a call on 07 31391372.
As with all loans normal credit criteria applies and applications are assessed on their individual merits.
Thinking of buying a new, high quality apartment or townhouse? Talk to our friends at Mosaic Property.
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