When Your Parents Really Want You to Leave the Nest!
More younger Australians are taking up Parent Equity home loans as they look to take advantage of today’s favourable market conditions for first home buyers.
This trend has occurred for a variety of reasons such as the difficulty in saving up such a large deposit, required to enter the home buyers market.
Parent Equity home loans are designed so parents, parents-in-law or step-parents can help their children purchase their own home by using the equity in their property.
Depending on how much a family member is willing to guarantee, the home buyer could borrow up to 100 per cent of the purchase price as well as an additional 10 per cent of the price to help with the associated costs of the purchase, such as stamp duty and other fees.
Using the Parent Equity home loans home buyers may be able to avoid paying lenders mortgage insurance (LMI), which can amount to thousands of dollars. When the property increases in value or when the loan is sufficiently reduced, the guarantor (the parent) can be released from the loan.
The Parent Equity home loans is a great product to help enter the home buyers market. Current market conditions are ideal for first home buyers, particularly with low interest rates and a stagnant property market.
^Paul – Lending Services Manager