How can I remove my guarantor?

Any general questions you might have in regards to loans and finance.
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Otto Dargan
Mortgage Specialist
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Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: How can I remove my guarantor?

Post by Otto Dargan »

Hello Gonzalez99. Welcome to the forums.

Yes, you can remove you guarantor from your home loan. While removing a guarantor from the home loan, the primary concern to the banks is your Loan to Value Ratio (LVR), which is the percentage of the your remaining loan amount against the value of your property.

You can apply for a loan and release your guarantor otherwise it will stay in place for the life of the loan. If you or your parents really want to, some lenders will actually allow you to remove the guarantee once your LVR is at 90%. However, please note that you’ll have to pay an LMI premium since the loan amount is 80% of the property value.

On the other hand, once your LVR is at 80%, you can remove the guarantee and avoid the cost of Lenders Mortgage Insurance. Some people are under the impression that the guarantee is automatically removed when you owe less than 80% of the property value. This isn’t the case, unfortunately.

Going by your property estimate, the LVR would be 82.35%, you would have to pay around $6,440 as LMI, at the max. You could use our LMI calculator to figure out how much LMI is applicable to you.

You can enquire online or give us a call on 1300 889 743.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

User avatar
Otto Dargan
Mortgage Specialist
Posts: 7730
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
Contact:

Re: How can I remove my guarantor?

Post by Otto Dargan »

Hi Gonzalez99,

You can apply for a refinance loan with the same bank or with a different lender and remove the guarantor.

You should apply to the bank to remove the guarantee when the following conditions have been met:
  • You can afford the repayments without any assistance.
  • Your loan amount is less than 90% of the property value (ideally 80% or less).
  • You haven’t missed any payments in the last 6 months.
You can still remove the guarantee if you owe more than 80% of the property value but you may have to pay LMI to achieve this.

Also, we can be reached on 1300 889 743 or you can fill in our free assessment form to see how you can release your guarantor.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

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