A popular way for young Perth first home buyers to enter into home ownership is with the assistance of their parents. This is another solution that we’re family with and help people all over Perth achieve so they can work towards having the keys to the first home in their hands sooner.
In simple terms, the is process involves using equity in the parent’s property as security against the new property or house and land package being purchased. Cash in term deposits can also be used as suitable security.
Once the children have built 20% equity in the new property, it is revalued and if agreed, the parents can be released as guarantors, meaning their equity or cash in the term deposit can then be released.
There are many benefits for a guarantor / parental assisted loan because the new loan for the children is capped at 80%, that means there is no mortgage insurance premium leading to the saving of significant dollars.
Loans may be easier to obtain if the risk is lower and under 80% loan to value i.e. Security amounts are usually 20% of the new property taken as a charge over the parent’s property or over cash in a term deposit.
Some of this can seem complicated, which is why we’re here to make sure first home buyers in Perth have a team ready to take them through it and start on the path towards home ownership for the first time.