Many parents get just as excited about their children’s first home purchase as the “kids” themselves. They’re often involved in helping select the property and providing advice. A facility is available which enables parents to help with the purchase at no direct cost to themselves. A “Family Guarantee Loan” enables parents, or another family member, to use their own home as security for up to 20% of the new home.
This can be an invaluable aid to younger family members making the big step of buying a home. In particular:
- The buyers may be able to afford a more appropriate property for their needs.
- It may enable them to purchase at a time when they don’t have a deposit available.
- It will avoid the need to pay costly mortgage insurance (usually required when borrowing greater than 80% of the purchase price).
- The liability of the parents (or other family relationship) is limited to 20% of the purchase price and this will be reduced as the mortgage is reduced.
This is an easy and cost-free way to assist your family into their first home. We help many families with these types of loans, so please give us a call for more information.