Being a guarantor on a home loan is a popular question. Many parents aspire to help their grown up children get on the property ladder. It is often asked how to go guarantor on your child’s loan, or how your parents might be able to gift or use equity in the home to help you buy a property. We can discuss with you a family supported home loan.
Our professional service makes it easy to understand how your parent can go guarantor, provide equity, or give a gift on your home.
How it works
In simple terms, a parent who owns a home, can use the equity in their home to be shared with their child as a house deposit. Rather than giving your child real cash towards a home, this theoretical transfer of equity helps your child get a home loan.
Family loans can help children get a home loan more easily
With rising property prices, it can be smart for children to quickly get on the property ladder. A family loan / home loan allows you to raise money from the parent’s mortgage and transfer this to the child’s new home loan.
This can help the child or recepient of the family supported home loan to be able to buy a home much sooner in life. It would mean needing to not save as much to buy a home loan, and not need to wait so long.
How to apply for a family loan?
Contact us now to discuss the application process. We provide a professional service and mortgage broker that can discuss this option with you. Talk to us about the situation and we can see if we can help about applying for a family supported home loan.
What information is needed?
Typically we will need to understand what type of property or home the parent currently owns, as well as their financial situation and how much is remaining on their mortgage. We’ll also then need to understand the child’s financial situation, such as their income, expenses, job, and so forth. We can then consider what the possible options can be, for example a deposit could jointly come from the family supported home loan, and some money from the child’s own savings or KiwiSaver (if any).