Page 141 - Smart Money

NO DEPOSIT

HOME LOANS

There are options available to home buyers who do not have a deposit
to purchase their own home. One such option is a guarantor home loan.

Guarantor home loans
A guarantor home loan is a type of mortgage where the parties who are
purchasing the property gain assistance from a friend, relative or family
member. The person acting as the guarantor will use the equity in their
own property as security.

Guarantor loans tend to be very popular with first home buyers. Many
young people who are looking to purchase their own home often struggle
to save the necessary deposit required by many lending institutions, or
may simply be unable to get a loan by themselves. There can be a range of
other scenarios in which someone may not be able to get a loan and these
can often give rise to using a guarantor mortgage.

Before you take out a guarantor home loan there are a few important
things you should consider.

Advantages

$ You will not need to pay mortgage insurance: Your lender
will view your mortgage differently if you have another security
property. They will consider it to be low risk and this means you
will not need mortgage insurance. Mortgage insurance can be

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