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100% Mortgages Require Parental Guarantors

Lenders are returning to the days of 100% and above home financing, but with the proviso that parents with equity in their homes act as guarantors.

A 100% loan called the Get Ahead Start Home Loan is being offered by SGE Credit Union and is said to be the first time in three years that a lender has prominently offered loans with no deposit required.

“The loan option allows parents to use some of the equity in their own home to guarantee part of a home loan taken out by their children,” explains SGE, “This gives the children the ability to borrow more, or borrow up to 100% of the value of the property plus stamp duty and other upfront costs.”

No deposit loans were prominent during the boom years of the early 2000s, but these products disappeared following the global financial crisis, as lenders shored up their lending policies.

Source:http://www.propertyobserver.com.au/mortgages/wednesday-16-news-lenders-return-to-100-plus-mortgages-but-with-parental-guarantor-requirement?utm_source=po&utm_medium=aida&utm_campaign=news