For many first home buyers, the challenge isn’t affording repayments, it’s saving a deposit fast enough. That’s where guarantor loans can make all the difference.
How Guarantor Home Loans Work for First Home Buyers
- Use a family member’s property equity to reduce or eliminate the deposit gap
- Avoid paying costly Lenders Mortgage Insurance (LMI)
- Buy in your preferred location sooner
How YMB Finance Helped Sarah Buy Her Dream Home
Sarah, 36 thought she was still a few years away from buying. She’d been saving for a deposit but didn’t have the full 20% lenders usually require. Then she came across a property that was excellent value, the kind that wouldn’t stay on the market for long.
To make the purchase possible, Sarah approached her sister and brother-in-law about becoming guarantors, using the equity in their own home. With YMB’s guidance, a meeting was held to explain exactly what being a guarantor meant and how their risk would be managed. Confident in the process, they agreed to support her.
The loan was approved, Sarah secured the property, and within three years, the home’s value had grown enough for her guarantors to be released. She was able to enter the market much sooner than planned, and her family’s commitment was only temporary.
Thinking about a guarantor loan? We can help you understand the process and find the right path to homeownership.
For the full picture of guarantor lending, read: How Guarantor Home Loans Work in Australia.
Benefits for First Home Buyers
- Faster entry into the market
- Ability to buy a home that meets long-term needs (not just a stepping stone)
- Support from family without a cash gift
Risks to Be Aware Of
- Higher repayments than expected if you buy at the top of your budget
- Family property tied up until you can release the guarantor
Ready to explore whether a guarantor loan can get you into the market sooner? Book a consult today.
Read more about guarantor home loans and our commonly asked questions here.