- Toongabbie NSW 2146
- Soma@brightpathfinance.com.au
Guarantor Home Loans: How Parents Can Help Without Taking All The Risk
Parents and close relatives often want to help children into their first home, but do not always understand how guarantor loans really work.
Help your kids into the market without handing over your savings
A guarantor structure can support a purchase using existing equity instead of cash.
Suggested sections
- What is a guarantor home loan?
- Limited vs full guarantees.
- Using equity in the parents’ home to support the kids’ loan.
- Benefits of guarantor structures
- Reduce or avoid LMI.
- Enter the market sooner with a smaller deposit.
- Risks for guarantors
- What happens if repayments are not made.
- How much of the guarantor’s property is at risk.
- How and when a guarantee can be released
- Revaluation once the loan has been paid down or the property has grown.
- Practical steps and documentation required to remove the guarantee.
- Setting clear family expectations
- Written agreements within the family.
- Encouraging advice from both legal and financial professionals.