Saving for a house deposit can be a daunting task and if you’re paying rent whilst you save, it can feel impossible.
But if you have a family member with equity in property, I might have a solution that can get you on the market sooner AND save you thousands of dollars.
It’s called a ‘guarantor loan’ and it allows you to borrow your deposit and purchase costs against the value of a family member’s property.
How it usually works:
- You borrow 100% of the purchase price, including purchase costs
- 80% is secured by your new property
- 20% plus purchase costs is secured by your guarantor’s property
The best part is that because the amount you’ve borrowed is less than the combined value of the two homes, you don’t have to pay expensive Lenders Mortgage Insurance (LMI).