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Re: What is a parent assist home loan? How does it differ from a guarantor home loan?

Posted: Fri Sep 20, 2019 7:26 pm
by Otto Dargan
Hello Lucille. Welcome to the forums.

A parent assist home loan is where your parents provide you with a loan of up to 20% of the property value. Essentially, you’re borrowing money from your parents, but it is not a gifted deposit as you would need to pay them back with interest.

By doing so, you avoid the cost of paying Lenders Mortgage Insurance (LMI) and the best part is you and your parents get to decide on the interest rate, which can be less than 1% p.a.

You and your parents will have to get an independent legal and financial advice before moving forward with this loan. Once all parties have done that, you will need to enter a legal binding agreement that will be overseen by a solicitor.

Parent assist home loans differ from guarantor home loans because your mom and dad are not putting their home as security to finance your home loan. This means that if your parents do not own property, they can still help you finance your home loan under the parent assist home loan scheme.

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

Cheers,

Re: What is a parent assist home loan? How does it differ from a guarantor home loan?

Posted: Fri Sep 20, 2019 7:55 pm
by Otto Dargan
Hi Lucille,

A parent assist home loan might be perfect for you as you do not have to show a deposit or genuine savings, as your parents are lending you 20% of the property value.
  • Since you’re borrowing less than 80% of the property value, this means the loan to value ratio is also less than 80%, meaning you don’t have to pay lenders mortgage insurance.
  • Your parents’ property is not used as a security for your mortgage.
  • Your parents’ don’t have to be on the title of the property.
  • Lower interest rates on the parent assist loan will allow you to pay off their mortgage sooner.
  • If eligible, you can even apply for a First Home Owners’ Grant (FHOG).
Cheers,

Re: What is a parent assist home loan? How does it differ from a guarantor home loan?

Posted: Fri Sep 20, 2019 8:16 pm
by Otto Dargan
Hi Lucille,

Besides having a sizeable deposit, these are other things you should be aware of as a first home buyer:
  • There are many additional costs involved in purchasing a property like conveyancing costs, transfer fees, registration fees, etc. Therefore, it is best to keep at least 3-5% of the contract price for fees, duties and charges.
  • Check to make sure you're eligible for a first home owners grant (FHOG), which can range from $5,000 to $25,000 depending on the state
  • Make sure all the required home loan documents are updated and in order so that your approval process is quicker.
  • Sort out your debts and credits and pay off any large debts so it does not remain on your credit file for a prolonged time period.

We have helped many first home buyers in difficult situations buy their first home.

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

Cheers,