A Family Guarantee loan is a way for your parents or family to help you purchase a home without them actually providing the cash for a deposit. A family members can use their own home’s equity to provide additional security for a portion of your loan amount. This solution reduces your loan to value ratio which can save you a significant amount of money by avoiding the need to pay Lender’s Mortgage Insurance. So you get into your home faster, with help from your family.
Below are the key features of one of our lenders family guarantee policy:
- By increasing your security through a security guarantee from your family, you will reduce the loan value ratio of your loan to under 80% and this eliminates paying Lender’s Mortgage Insurance.
- First home buyers who are also owner occupiers may be eligible for $50,000 extra lending in addition to the loan amount to use for home improvements.
- Minor debts may be consolidated into the loan amount if they are less than 5% of the purchase price.
- The guarantee will be released once the limited amount of the guarantee is paid or (subject to approval) when the standard loan to value ratio (LVR) requirements are achieved. The guarantor or borrower may request a revaluation at any time to confirm the LVR, at the cost of the borrower/guarantor.
- Standard guarantee and legal fees will apply. This includes land titles registration fees and the cost of obtaining Independent Legal Advice.
- The guarantor can be a new or existing Heritage Home Loan customer or even retain their home loan with their existing home loan provider.
Am I eligible?
- Family members who can provide the Family Guarantee include parents, sons and daughters.
- You can use a Heritage Family Guarantee to buy or build a home or invest in residential property, and you don’t have to be a first home buyer to be eligible.
- Individual applicants are restricted to a maximum of one parental guarantee/family guarantee borrowing.
- No single guarantee is to represent more than 50% of the guarantor’s security.
- Family Guarantee is not available for existing loans or refinances.
To round off, if you are a first home buyer and build your first home in QLD under the Family Guarantee, then you may be entitled to $20,000 grant.
As of 1st July 2016, the First Home Owner’s Grant will be boosted to $20,000 (compared to the usual $15,000) for 12 months to assist anyone acquiring their new first home.
Eligibility for the Queensland First Home Owners’ Grant:
- The buyer cannot be a company or a trust
- The buyer must be at least 18 years of age
- The buyer must be an Australian citizen or permanent resident (or applying with someone who is an Australian citizen or permanent resident)
- The buyer or spouse has not previously owned property in Australia
- Purchase price cannot be more than $750,000.
A ‘new home’ that entitles the buyer to the First Home Owners’ Grant is a house, unit or townhouse that:
- Has not been previously occupied as a place of residence
- Has not been previously sold as a place of residence
If you have been thinking of buying or building your new first home, then this will be the perfect opportunity. Why wait, call me on (07) 46130311 or 0439735404 and we can organize a suitable time to sit down and chat.
By: Steve Pram