What is a Family Guarantee and how can it help you buy your home sooner?

 

Guarantor loans could be the solution to get you into the property market. Guarantor loans work by providing additional security (usually home equity) from a third party – often a family member. The guarantor isn't required to make any payments on your loan. But if you can no longer keep up your repayments, the lender will turn to the guarantor to make the repayments. 

 

In this way, it’s possible to get a home loan even when you have a small deposit by borrowing up to 105% of the property's purchase price. To find out if your borrowing power will support the loan amount and that the equity provided is acceptable, get in touch with us to begin the process.

 

We will meet with you and your Guarantor to discuss how a Family Guarantee works, and make sure everyone if confident and comfortable with moving forwards. For your parents, it's a way to help you into your first home when you ahve a lower deposit, without needing to provide a monetary gift.

 

The Guarantee can be released once the lending is less than 80% of the properties value either by repaying the loan, the value of the property increasing, or a combination of both.