Family Pledge Loan: What Do I Need to Know?
First-time homebuyers have several resources at their disposal. The Australian government invests and helps lenders issue mortgages to turn more renters into homeowners. Lenders have also evolved their products to adapt to the public’s needs. That’s one reason why the family pledge loan exists.
The ages of first-time homebuyers in the Australian housing market have increased. This shows that it has become more challenging to become a homeowner at an early age. Plus, young individuals have little to no credit history or employment history. They probably don’t have a 20% deposit saved either. Therefore, they can lean on their parents to help them become homeowners through the family pledge loan.
Parents use their homes as collateral for their children’s mortgages. The strategy increases the first-time homebuyers borrowing capacity and power. Instead of receiving 70% to 80% financing, lenders can lend up to a 110% loan-to-value ratio. It’s a nice way to start the homeownership journey. Moreover, the loan receives more favourable loan rates.
Mortgage House is a non-bank lender that issues family pledge loans. Our loan specialists work with the buyers and their parents to move the application efficiently along the stages. In addition, they help the parents ensure that they understand the parameters of the loan. Plus, our team double-checks that the property qualifies as collateral.
In most cases, the loan process for family pledge mortgages moves smoothly.
Family Pledge Loan Conclusion
A Mortgage House family pledge loan is a viable funding option for first-time homebuyers. To start the application process, contact our loan specialists today.