Hi Sally A,
Thank you for reaching out to us and welcome to the forums.
Yes, your parents can be accepted as guarantors by banks if they are both Australian citizens
. Guarantor loans are perfect for you as it allows you to borrow 100% of the purchase price. It is the only no deposit home loan that is prevalent in the market right now.
There are 4 different types of guarantee
you need to know before taking up a guarantor loan:
- Security guarantee: In this guarantee, the guarantor uses their property to secure your home loan. Even if there is already a home loan on the property, you might be eligible to take out a second mortgage. This guarantee is popular with first home buyers who have a good credit history and no deposit.
- Security and income guarantee: This guarantee is common for parents who want to help their children to buy their first property. Besides providing their property as security, their income can also be used as additional security.
- Family guarantee/parent guarantee: It is also referred to as “parental guarantee” as the guarantor is directly related to the borrowers. These guarantors can even include siblings, grandparents and other related family members, however, they are considered on a case by case basis.
- Limited guarantee: As only part of the loan is guaranteed by the guarantor, this reduces any potential liability of the guarantor’s property.
Our specialist mortgage brokers are experts in guarantor home loans.
If you need any help, call us on 1300 889 743 or complete our free online assessment form
so we can go through your options.