What is a Parental Guarantee?

Borrowers often have a shortage of deposit or insufficient funds to cover the cost of stamp duty and mortgage insurance. Most lenders will allow a Parental Guarantee.
This means that the parents’ home can also be offered as additional security to the lender. Parents will be required to sign mortgage and guarantee documents for this to occur. The approved loan may cover 100% of the purchase price plus costs, but the loan amount is no higher than 80% of the total security offered. This means that buyers can purchase immediately rather than having to wait until sufficient funds are saved. The usual mortgage insurance premium will also be eliminated.

Lenders will have strict rules concerning Parental Guarantees and adequate proof of income and ability to repay must be provided. When borrowers have sufficient equity in the purchased property, the lender will no longer require the Parental Guarantee and the parents’ property title will be returned to them.

Lenders will require parents to receive independent legal advice prior to settling a Parental Guarantee loan.

What our customers say about us

Thanks for all your help and for making it so easy for me. Life will be so different now.

Jan Vincent
Montrose, VICTORIA

Thank you for your time on the phone yesterday and copying me into the below email.
I just wanted to take the time to say that I have never seen such a comprehensive email provided to clients by a Broker before. Very clear and detailed.
I hope it’s ok that I hold onto your details to refer to clients who may need assistance.
Kind Regards,

Shannon Oatley
Director & Licensed Conveyancer
Property Conveyancing Group, VICTORIA

We have found Barry Le Brocq of Melbourne Mortgage Finance to be very patient, caring and diligent in achieving a successful outcome to our refinancing requirement. We have no hesitation in recommending his services to others.

Don & Christine Perrett
Leongatha, VICTORIA

Many thanks Barry for the exceptional service that you have provided. We will most certainly be recommending you to our daughter (Bank of Melbourne branch manager) for any future customers who need a reverse mortgage loan.

Paul & Barb Spark
Somerville VICTORIA

 

LENDING UPDATE 14.06.19

  • LIVING EXPENSES ARE NOW A KEY ISSUE
  • COMPREHENSIVE CREDIT REPORTING NOW IN EFFECT
  • INVESTMENT LOANS AT OWNER-OCCUPIER INTEREST RATES
  • REVERSE MORTGAGE LOANS FOR SENIORS OVER 60
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