How to Use a Guarantee to Buy a House

Teach Me Money

If you're a first home buyer feeling overwhelmed by deposit requirements in today's property market, this episode unpacks a potential solution you might not have fully understood - guarantor loans. We're talking about how this financial tool could help accelerate your path to homeownership, even in the current cost of living crisis.

We'll explore how a family member can use their property equity (not cash) to help secure your home loan. Using real examples, we'll break down how this works - like turning a $30,000 deposit into a $120,000 one for a $600,000 property, potentially saving you from paying expensive lenders mortgage insurance (LMI).

We're also tackling the serious side of guarantor arrangements. From bank requirements and assessment processes to the responsibilities and risks for both borrowers and guarantors, I'll give you a comprehensive understanding of what this commitment means for everyone involved. Plus, we'll discuss how these arrangements can eventually be released once you've built sufficient equity in your property.

A security guarantor can be a powerful tool in your home-buying arsenal, but a decision that should be made with careful deliberation and informed consultation with everyone involved. Always engage with a trusted mortgage broker to navigate the options available with different banks, and have comprehensive discussions with your guarantor to ensure they're comfortable with the commitment.

LINKS

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Website: https://goldentrianglefinancegroup.com.au/