What is a Family Pledge Home Loan?
Data shows that the deposit on a home in Australia stands at $100,00 in many cases. It also shows that the young require at least five years to save that much. To help young homebuyers become homeowners, non-bank lenders, such as Mortgage House, offer the family pledge home loan.
This mortgage option doubles as a guarantor home loan. If the homebuyer cannot provide the 20% deposit, the guarantor provides the guarantee. The guarantor must own their home. Plus, they must be the homebuyer’s parents. Their home acts as collateral against the mortgage, which provides several benefits.
First, the homebuyer’s borrowing capacity increases. All lenders search for ways to minimise risk with every newly approved home loan. Second, it allows the homebuyer to avoid paying the lender’s mortgage insurance fee. Australia offers first-time homebuyer grants. A family pledge mortgage allows you to remain eligible.
A mortgage backed by family property puts the property at risk. If the homeowner fails to repay the home loan promptly every month, it creates financial problems for both parties. Thus, the guarantor needs to have plan B in mind.
Mortgage House encourages prospective homebuyers to explore our online calculators, such as the mortgage calculator. It’s a great way to set expectations and make adjustments beforehand. For example, it may be wise to opt for a starter home rather than a dream house.
Family Pledge Home Loan Conclusion
Those interested in learning more about the family pledge home loan can contact our Mortgage House loan specialists. Each specialist is ready to answer your questions.