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Re: Slightly confused about who can be my guarantor

Posted: Fri Aug 09, 2019 6:02 pm
by Otto Dargan
Hello Kassie.

Thank you for reaching out to us and welcome to the forums.

Having a guarantor is a great way to get a home loan if you do not have a big enough deposit.

Most banks and lenders allow your parents, spouse or de facto partner to be guarantors. Some lenders even make exceptions for siblings and grandparents. Depending on your relationship, even your aunt or cousin could act as guarantors.

However, most banks and lenders do not allow friends (unless they have term deposit to use as security), work colleagues, associates, former de facto partners or spouses to be guarantors.

The guarantor must:
  • Be above 18 years of age.
  • Be an Australian or New Zealand citizen (some lenders accept guarantors that are living or working overseas)
  • Be of sound mind and they need to seek legal and financial advice before becoming your guarantor.
  • Be currently working, however, exceptions can be made for self-funded retirees or on pension as long as they obtain legal advice prior to signing the loan offer).
If your guarantor is not an immediate family member, then you will have to provide a witnessed statutory declaration confirming their close relationship with you. This can strengthen your case to the lender.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a guarantor home loan.

Cheers,

Re: Slightly confused about who can be my guarantor

Posted: Fri Aug 09, 2019 6:21 pm
by Otto Dargan
Hi Kassie,

Guarantor loans are the only way to borrow up to 105% of the property value.

As a borrower, you get the following benefits from a guarantor loan: However, you also have to analyze the risks involved. The guarantor is liable for part of the loan. If you fail to meet the loan obligations and default, the guarantor will be responsible for the amount they have guaranteed.

Cheers,

Re: Slightly confused about who can be my guarantor

Posted: Fri Aug 09, 2019 7:50 pm
by Otto Dargan
Hi Kassie,

You will still be able to borrow 105% of property value or 105% Loan to Value ratio.

A limited guarantee is where only part of the loan is guaranteed by the guarantor. This is most often used with security guarantors so as to reduce the potential liability secured on the guarantor’s property. Guarantees can either be limited or unlimited, depending on both the guarantor’s wishes and the lender’s requirements.

Different banks and lenders have different ways of calculating a limited guarantee. You can use our guarantor loan calculator for more details.

Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a guarantor home loan.

Cheers,