A family guarantee home loan could save you thousands of dollars if you have family members who are willing to help you out with your purchase.
Basically, one of your family members will provide their home or investment property as additional security to keep the loan below 80%, which means you save on Lenders Mortgage Insurance (LMI).
There are 2 types of Family Guarantee or Family Pledge loans:
• Full Guarantee – the family members put their whole house as security and show the lender they can back up the loan with their income if required
• Limited Guarantee- this is where you can use only the amount required to secure the loan at 80% and no income guarantee required (you will need to show you can service your own debts)
For example:
The borrower is buying a $500,000 property with their own savings and requires a 90% loan (10% plus costs paid). Due to the loan being greater than 80% of the total purchase, the LMI will be approx. $8,000. By using a family guarantee, the family members may only need to guarantee the 10% ($50,000). However, if the family members’ own loan is greater than 80%, they can’t be a guarantor.
Your Mortgage Corp family guarantee loans specialist can arrange a lender valuation on your property before we proceed.
Case Study: Buying Property with A Family Guarantee
Another advantage with family guarantee loans is when the borrower’s loan is paid down and the value of the house has increased to 80% or more of the total purchase, you can remove the guarantee, or remove it anytime with a possibly reduced LMI charge.
To find out if family guarantee loan is suitable to your individual circumstance, speak to your Mortgage Corp home loan specialist.
About Mortgage Corp
Based in Mount Waverley, Melbourne, Mortgage Corp specialises in helping successful professionals and property investors access discounted premium rates, minimise loan approval red tape and apply strategic loan structuring for long-term investment success.
Unlike many mortgage brokers that may be able to help you with general loans but simply don’t have the skills, experience or resources to genuinely help property investors maximise long-term wealth, Mortgage Corp loan specialists help investors develop a strategic approach to property investing for long term investment success. Book a FREE Consultation today to discuss your financial goals!
