100% mortgage
Financial and Home Loan Brokers in Sydney

By Dave Fleming : 17 October, 2018

They grow up so fast. One minute they’re nagging you for a dollhouse, the next, it’s for help buying a two bedroom unit in an up-and-coming suburb. If you always find it hard to say ‘no’ to your kids, here’s how to say ‘yes’ the right way.

mortgage brokers - man wandering in the desertYou’ve probably heard your children complain about how hard it is to crack into today’s property market.

And smashed-avocado shenanigans aside, they do have a point. It is tougher nowadays.

With the property market constantly on the up-and-up, reaching that 10% to 20% deposit can feel like a mirage for your child.

The good news is that you can help them obtain that slightly out-of-reach home loan by using the equity in your property.

How it works

Banks find it risky to lend to borrowers who have an unstable job or low deposit. But they do allow seemingly more-reliable immediate family members to guarantee a home loan.

Guarantor loans have huge benefits for your children, including:

No deposit required: If guaranteed against a parent’s property equity, your child may be entitled to borrow 100% to 110% of the purchase price of a property. That means no deposit is required. Instead, your child can focus their savings on white goods and repayments.

Discounted interest rates: Guarantor loans can come with reduced interest rates and we can help you secure a great deal.

No Lenders Mortgage Insurance (LMI): Your child will likely not need to get LMI because the equity is usually enough of a guarantee to protect the lender against losses.

Things parents should keep in mind

Sounds great, right? But it’s not entirely without its risks. Here’s what you as a parent need to keep in mind:

Safeguard your credit report: Be sure that you can honour the repayments in case things go awry and your child is unable to pay. You should be positive that they will uphold their end of the bargain, but also prepare for the unexpected.

Financial risk versus emotional benefits: Going guarantor makes you financially responsible if your child defaults on payments. The emotional benefits, however, can outweigh the risk.

Impacts on your borrowing capacity: Future credit providers will take into account the guaranteed loan. They will assess your borrowing capacity based on it, and whether or not you are an active participator in the repayments of your child’s mortgage.

How we can help

We understand that when it comes to your children, it can be near-impossible to take your emotions out of decision making. That’s where we come in.

We can help you calculate whether or not you have the equity to make this work, and assess your child’s financial capabilities to see if they’re in a position to be making repayments.

We’ll also help you understand your legal liability as a guarantor before helping you make the big decision. So give us a call today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

By Dave Fleming : 17 October, 2018

Defining a mortgage
how a mortgage worksA person can purchase a property immediately using a specialised form of loan which goes by the name of a mortgage. This bank loan is normally provided by banks and building societies. With the sheer number of mortgages now available, it just makes sense to review your options just before taking one. It would probably be attainable to borrow money in some alternative way to fund the purchasing of a property, but mortgages are the easiest way to do so, and have become the acknowledged standard way.

Usually, getting a home is associated with the thought of having a mortgage loan. It may be confusing and difficult to comprehend the offers you encounter. For these reasons you have to diligently compare mortgages.

Putting it all on the house
By getting a 100% mortgage, you’ll be able to fully finance your need to buy a house without the requirement of giving an agreed down payment amount. This may seem enticing at first, but it is likely that the loan provider will charge you extra in fees and the interest for their assistance, making this kind of mortgage less attractive than it may at first look.

Additionally, when the loan is much the same as the value of the property the fees for Lenders mortgage insurance can be prohibitive.

The mortgage rate of interest is possibly the major element to consider when comparing mortgage loans. The amount derived from the interest rate is an amount you’ll have to pay off aside from what you have loaned. There are two significant available choices – a principal and interest repayment mortgage and an interest only repayment mortgage. This implies that one could either pay both the interest and a portion of the capital, or maybe just pay the interest applied to the lent sum of money. Of course, an interest only mortgage will still request you to pay the capital, however not while you’re still paying for the interest. The mortgage interest rate would be a major aspect to consider when you compare mortgage loans. Interest only mortgages allows you to pay out the principal balance and also the interest in two distinct periods.

A Plethora of choices

A mortgage has lots of various types. The list contains discount mortgages, buy to let mortgages, self-certification mortgages, fixed ratemortgage word cloud mortgages, capped mortgages, and first time home buyer mortgages. It is not so easy to comprehend most of the various kinds, they can only really be understood by someone who has a great deal of experience with mortgage loans.

The first time client mortgage is certainly aimed at the 1st time buyer. Many loan providers only make it simpler for those who’re in this position to apply for and get them.

You will be able to borrow a reasonably large sum of money by having a home loan. With that in mind, you need to be sure that you’ll be having available great selection that fully suit your your needs and your ability to acquire a loan that you can comfortably pay back. This is attainable if you do a comparison of mortgages meticulously.

Major things to consider

Mortgage basics on a blackboardIt is very important to check your full options for house loans just before picking one, given that mortgage loans are quite abundant in the market. This is why evaluating mortgage loans very carefully is crucial.

You can efficiently do a comparison of mortgage loans once you get the mortgage rate of interest and any fees as a major consideration. There are many mortgage loan kinds available today like first time home buyer mortgages, low doc mortgages, rent to buy mortgages, discount mortgages, basic rate mortgages, honeymoon mortgages, fixed rate mortgages, and many more.

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