As a rule of thumb, banks
want you to come up with at least a 20% deposit of the purchase price, even
though sometimes you can put less down and pay for lenders’ mortgage insurance
However, if you can’t
complete a 20% deposit, you have the option of using a family guarantor.
This is where an immediate
family member allows the equity in their property to be used as extra security
for your home loan.
If your parents are
willing and able to become the guarantor, then this can be a great solution for
young investors looking to borrow with a high LVR.
If you do this, make sure
you split the loan in two portions: the portion your parents are guaranteeing
and well as the portion that they are not guaranteeing.
You should work on
reducing the portion that your parents are guaranteeing so you can release them
as soon as possible.
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Friday, 11 March 2022