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Smart Money

expensive and not having to take it out can save you thousands of
dollars

$ You do not need a deposit: If your guarantor has enough
equity in their property, you will not need to pay a deposit on
your home. This will allow you to borrow 100% of the purchase
price on your property
$ The guarantor can be removed down the track: Taking out
a guarantor home loan is not forever. You still have the flexibility
to remove the guarantor from the mortgage once you have enough
equity in your home
Disadvantages

$ The guarantor carries liability: The guarantor on your home
loan is liable for part of your debt. This means that if you default
or miss a payment, the person acting as guarantor must meet these
commitments. This liability is limited to the amount of security
given by the guarantor, usually this is 20% of the purchase price

$ Limitations when buying and selling: There are some
restrictions around selling the security properties. You need to
fully understand these limitations prior to going guarantor
Other options: Smart Families

If you cannot find someone who wants to act as guarantor, there is now
a new product on the market that may be a viable alternative. In some
cases, the person who is considering acting as your guarantor may not
wish to put their own property at risk.

The Smart Family Home Loan is an arrangement where your parents
lend you the money you need; it is a formal arrangement that is managed
by your lender. There is no guarantor relationship that exists. A Smart
Family Loan allows you to borrow up to 20% of the purchase price of
your property from your parents. It is considered to be a formal loan
and interest is charged at half the interest rate on your mortgage. Having
access to these funds will mean that your parent’s home is not used as

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