If I need help to buy a home, what can I do?
Published by MFAA
If you can’t save a deposit to get a mortgage or home loan, maybe your parents, a relative or friend can help with a gift, loan, or go as home loan guarantor.
Obviously, the most appropriate loan is one you don’t have to pay back.
If someone is willing to give you money to help you buy a home – and doesn’t expect it to be repaid – you’re very fortunate. But make sure you get it documented. Otherwise your lender will consider it a loan that has to be repaid.
Your parents might be able to help you with a deposit for a home loan – but they probably want it repaid.
Still, this could be a big help, particularly if they are offering the money at a favourable interest rate. Again, you should have the parental loan documented because your lender will want to know the details.
Home loan guarantor
Your parents mightn’t have any spare cash, but they might be able to help you by going guarantor on your loan.
For example, your parents may have equity built up in their own home that a lender would consider as security – if your parents were agreeable.
However, your parents should be aware that going guarantor on your loan will affect their borrowing capacity, and possibly their retirement lifestyle.
To learn more about parental loans and guarantees, contact an MFAA Accredited Finance Broker today.