First home buyers should be able to jump on the property ladder sooner rather than later thanks to recent changes by some lenders to their guarantor requirements.
Loan Market Melbourne broker Alexander Heifetz said several of Australia’s lenders have amended their Family and Security Guarantee Loans in recent months, removing certain restrictions for guarantors to include extended family members.
The changes now mean a guarantor will no longer have to be a parent, sibling or spouse of the borrower for a security guarantee, formerly known as a family guarantee.
“This change in policy is going to help certain first home buyers with healthy incomes but limited savings enter the property market with help from guarantees who traditionally haven’t been allowed to put their support behind a low-deposit holder’s mortgage,” Mr Heifetz said.
“Most guarantee loans are a single loan secured by both properties: the property purchased by the first home buyer and guarantors' property. The benefit of this option is that there is no requirement to make a lenders mortgage insurance payment and that you don’t have to demonstrate that a deposit you have was genuinely saved.”