Guarantor home loans are now the only way to borrow 100% of the purchase price as traditional no deposit home loans have been withdrawn from the market. Did you know that there are big differences between the guarantor supported home loans offered by different lenders? With the help of a guarantor you can borrow over 100% of the purchase price which will allow you to buy a home and pay for purchasing costs such as stamp duty at the same time. The guarantor can be your parents who will allow a percentage of their property to be used as security for the home loan.
Guarantor home loans have many benefits forther borrower:
- You do not need a deposit which allows you to buy a home now.
- Save money by avoiding Lenders Mortgage Insurance (LMI).
- You can borrow more money, which may allow you to buy the property you desire.
Every lender has a different name for guarantor home loans. Bank of Melbourne & St George Bank use the term “Family Pledgeâ€, CBA uses the term “Family Support†or “Family Equityâ€, ANZ and Westpac use the term “Family Guaranteeâ€. This is very confusing, however, they all mean essentially the same thing. Most of these terms refer to a security guarantee, as only a few lenders allow other types of guarantees. There are very big differences between the bank’s credit guidelines, loan types and discounts for family guarantee loans
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