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Territory Loans
Suite 2/52 Hartley Street, Alice Springs | Phone (08) 8950 6333
Do you want to help your children get into a property but don’t have any spare cash to help them?

Another option is a family guarantee which allows the bank to use some of the equity in your property to help out as extra “security” for their loan.

Unlike old style guarantees which meant you put your whole house on the line, these guarantees are limited to a set amount of the purchase price (for example 20% plus costs) and the loan is in the children’s name not yours.

The benefits to a family guarantee or pledge are:
• enable you to buy a home sooner if you don’t have a deposit saved
• help avoid or reduce Lenders Mortgage Insurance (this is insurance payable when you borrow more than 80% of the purchase price)
• maximise the amount you can borrow.

Example
Ky is planning to purchase a property for $400,000 which means he needs to have a minimum deposit of 5% plus costs which means Lenders Mortgage Insurance is applicable.
However, if Ky’s parents own their property freehold or have enough equity they could provide a guarantee of $80,000 as additional security so the LVR is 80%. This would result in the Lenders Mortgage Insurance being waived and save Ky about $13,800. Ky has to be able to service the loan for $80,000 and $320,000 for this to be viable.

Not all banks allow family guarantee and there are different rules at different banks so come and see Territory Loans and we can see what is the best option for you and your family.

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Richard Black (Credit Representative Number: 399502), Angelique Glasson (Credit Representative Number: 399501) and Kerry Thompson (Credit Representative Number: 486749)
are credit representatives of BLSSA Pty Ltd (Australian Credit Licence Number: 391237)