What are the benefits of having a guarantor on a mortgage?
Another benefit of having a guarantor is that you may save thousands of dollars by avoiding Lenders Mortgage Insurance (LMI). Generally LMI is required for home loans where you have less than 20% deposit i.e. the loan is greater than 80% of the value of the property.
How do I get a guarantor on a mortgage?
Find a broker A guarantor on a mortgage is the person who provides the additional security for your home loan. Most lenders prefer the guarantor to be a close relative – usually a parent, grandparent or siblings. Your guarantor doesn’t need to provide any cash payment.
How much can I borrow against my guarantor’s house?
Here, you’ll borrow 90% as a mortgage with 10% as a loan secured against your guarantor’s home. It’s worth noting rates are not as competitive as those of traditional repayment mortgages, so could end up costing you more in the long run.
Do you need a deposit for a Guarantor home loan?
In some cases, you may not need a deposit at all. That’s because a guarantor – usually a family member, offers equity in their own home as additional security for your loan. A guarantor home loan can also be a way to avoid the cost of lenders mortgage insurance (LMI).