One of the few ways through which you may be able to borrow the full amount of the property without any deposit is by getting a guarantor home loan. With a guarantor, you can borrow between 100% and 107% of the purchase price of the property and a few lenders don’t require you to have genuine savingsof your own.
How it works
The guarantors, usually your parents, provide a guarantee for the home loan which is secured on a portion of their property. A couple of lenders also accept family members and close relatives as guarantors.
Guarantor loans have the following benefits for you as a borrower:
- You don’t need a deposit.
- You don't need to pay an Lenders Mortgage Insurance (LMI) premium.
- Some lenders may offer discounted interest rates.
- It's possible to consolidate minor debts when you purchase the property.
- You may be able to limit the size of the guarantee which reduces the risk to your parents.
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