All Topics / Finance / Family/Equity guarantor loans – extended family member

Viewing 14 posts - 1 through 14 (of 14 total)
  • Profile photo of ediot123ediot123
    Participant
    @ediot123
    Join Date: 2007
    Post Count: 54

    Hi guys,

    Just wondering how difficult it is to get approval for a home loan with having an extended family member (uncle and auntie) being guarantor for your loan. Being equity guarantors only and not for servicability.

    I know some banks would assess this on a case by case basis so lets assume everything else is in good order ie. Borrowers ability to service the loan, good credit history, at least 5% genuine savings etc

    What are the most important things to consider when applying for a loan this way. Any advice would be much appreciated.

    Thank you

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Yes there is one lender in particular who will provide a security guarantee for any person, no relation related at all – let alone close family.

    Which lender is your aunty and uncle’s property with currently?

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of ediot123ediot123
    Participant
    @ediot123
    Join Date: 2007
    Post Count: 54

    I think they are with westpac. Im not 100% sure id have to double check. Would it be westpac by any chance that would allow this?

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Unfortunately WBC will only allow parental guarantee’s.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Unfortunately the Westpac product is particularly poor when it comes to Security Guarantee loans.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Unfortunately the Westpac product is particularly poor when it comes to Security Guarantee loans.

    Cheers

    Yours in Finance

    Indeed. Did one very similar to this recently, WBC didn’t want a bar of it. Refinanced over to a more amenable lender, cut 0.4% off the guarantor’s rates in the process. Everyone wins. (except the outgoing lender)

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Albert WaldronAlbert Waldron
    Participant
    @albert-waldron
    Join Date: 2009
    Post Count: 7

    I think the most important thing is to get everyone in a room together and talk about the upside and the downside.
    Why do the Aunty and Uncle want to help out, and what the downside if something goes wrong.
    They are a great asset protection method where people want to help out a newly ‘married/defact’ couple and protect their assets should the relationship break down.. I.E Aunty and Uncle should get their guarantee extinguished rather than trying to recover a cash gift. But it’s important that everyone knows what will happen if something goes wrong an the property falls into default.
    On the lending side the main thing is for Aunty and Uncle to has income to be able to service their current debts and the guarantee debt if it gets called. That way in the worst case Aunty and Uncle can still afford to service the total debt.
    I actually find these really good where parents want to help children over time where the eldest purchases first, so a traditional ‘gift’ deposit’ isn’t really fair due to rising house prices.

    Albert Waldron | Awesome Lending Solutions
    http://www.awesomelendingsolutions.com.au
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    Tailored solutions to build wealth through property

    Profile photo of Don NicolussiDon Nicolussi
    Participant
    @don
    Join Date: 2005
    Post Count: 1,086

    I have two lenders I use (for practical and policy reasons) for family guarantor / guarantee loans similar to the scenario you have mentioned. No particular relationship at all is needed. May be non related subject to the strength of the application and applicants.

    Don Nicolussi | Mortgage Broker - Home Loan Warehouse
    http://homeloanwarehouse.com.au
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    "I think of finance as a technology, a way of getting things done." Robert Shiller

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Yes agree with Don had one approved this afternoon for a forum member on a 980K purchase price and the security guarantee was provided by the employer.

    Some are better than others.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099

    Security guarantor can be provided by parents/siblings/ uncle/ friends sand even 3rd party—ie no relationship at all! as long as they are happy to sign and provide…

    In fact the bank can come on as 2nd mortgagee as well…so does’t matter to much which lender your Security guarantor is with.

    Normal rate.

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
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    Same Banks. Better Rates. Served With a Passion.

    Profile photo of fudge111fudge111
    Participant
    @fudge111
    Join Date: 2015
    Post Count: 20

    Hi property investors,

    This may be a stupid question but I am yet to start my property investing portfolio and am new to bank finance…

    Will the banks let you access the equity in your parent’s home if they have not used accessed it for any other assets, or do they only let you access your own equity to refinance?

    I think what I am trying to ask is ‘Is there any difference between them being the security as a guarantor and accessing equity to refinance, or is it basically the same thing?

    Thanks all

    fudge111

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    Fudge – different thing, but similar.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of fudge111fudge111
    Participant
    @fudge111
    Join Date: 2015
    Post Count: 20

    So would I be able to use the equity in my parents home (1.2 million) if they gave me permission to help me launch my property investing portfolio?

    What options do I have if this is possible?

    Thanks everyone,

    fudge111

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    So would I be able to use the equity in my parents home (1.2 million) if they gave me permission to help me launch my property investing portfolio?

    What options do I have if this is possible?

    Thanks everyone,

    fudge111

    Depends on the situation but you could possibly do this 2 wayas

    1. parental security guarantee.
    2. parents borrowing and onlending you the money.

    2 would be safer for them.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

Viewing 14 posts - 1 through 14 (of 14 total)

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