Guarantor Loans

Who is a Guarantor?

A Guarantor is someone who can help you get a home-loan by providing additional security for your loan. A Guarantor can be your spouse or someone from your family. The additional security offered by a guarantor can be their own property.

What is a Guarantor Loan?

The loan taken with the help of Guarantor is termed as Guarantor Loan. This loan is of great help when you are not able to secure the full loan amount by yourself. Under the Guarantor Loan, you don’t have to pay a deposit but you have to provide additional collateral.

How can I apply for a guarantor loan

Just get in touch with our brokers at Alliance Financials and we will guide you throughout the whole process and help you in securing a loan solution that is best fit for you

How a guarantor loan works?

When you are not financially sound enough to pay a deposit, but still wants to buy your own home. Don’t worry, you have an option of a guarantor loan. You can still own your home by providing a guarantee. Your guarantor will provide a guarantee for your home loan, which is secured on their property. In most cases, this is your parents assisting you in buying a home.

A guarantor home loan works as a way to get into the market sooner. Once you have paid off part of your loan or your property has increased in value, then you can apply to remove the guarantee. A guarantor home loan can also be a way to avoid the cost of lenders mortgage insurance (LMI). It’s a saving that can be worth thousands of dollars.

How much can you borrow with a guarantor loan?

With a guarantor loan, you can borrow up to 100% of the property purchase price or even up to 110% in some cases (such as if you’re consolidating other debts into the loan). This will depend on the lender, the guarantor’s financial situation and how much of the loan they’re willing to be responsible for. Some lenders may still require you to put down some sort of deposit, typically at least 5% in genuine savings, even with a guarantor. It also depends on which type of borrower you are:

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First home purchase: 105% of the property value

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Construction: 105% of the total land value and cost of construction

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Debt consolidation and purchase: 110% of the property value

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Investment: 105% of your investment property’s value

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Refinancing: 100% of the property value

How much can you borrow with a guarantor loan?

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You don’t need a deposit, allowing you to buy a home now.

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Your home-loan application will be strengthened and you will have a better chance of getting home-loan approval

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You can get into the property market faster

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Lenders Mortgage Insurance can add thousands of dollars to your home loan. With a Guarantor loan, you can save money by not paying an LMI premium.

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Discounted interest rates are available from some lenders.

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You can consolidate some minor debts, such as credit cards, when you buy your home.

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You can limit the size of the guarantee.

Is there a risk for Guarantor?

The Guarantor property is at risk. If the borrower can’t repay their loan and the guarantor can’t make the repayments either, the guarantor’s home could be repossessed by the bank.

But this can be avoided as a guarantor need not to secure the entire loan amount. Some lenders allow a limited guarantee that means the guarantor only needs to secure a part of the loan, rather than the entire amount.

How we can help?

We help you in choosing best loan for you according to your requirements and specified conditions. Our team of professionals take care of each and every thing personally so you don’t have to worry about anything.

We have a proven record of successful clients and we make sure without wasting your time, we offer you the best results