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Robin

2 years ago

Hi Tess. I recommend that you have a hard think about possible ramifications about this idea. It depends on many variables. Happy to discuss.

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Steve

2 years ago

Hi Tess we do these type of loans very regularly and it is a great way to help family get into a property of their own without incurring costs of Lenders Mortgage insurance and the need for a significant deposit. There are a couple of different approaches and the success of this type of transaction is dependent on your daughter and fiancee being able to afford the mortgage. Before proceeding with this type of transaction, it is important we have a good understanding of everyone's position with current and future objectives, features, benefits and risks. I am more than happy to discuss this with you at length so feel free to contact me directly.

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Alex

2 years ago

Hi Tess. Based on your question, your daughter & fiancée are fully reliant on you providing up to 50% or more of your property as equity. I recommend you don't take that risk & would be surprised if a lender agreed to lend on those conditions.

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Daniel

2 years ago

Hi Tess. Are you still employed. As you say you still have a mortgage of 225000. You can draw 5 or 10% of the property your family wants to purchase. This can be a separate account which they pay for. There is no restriction then on you selling your property any time you want to. Regards.

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LEZLI

2 years ago

Hi Tess. Short answer is you can help them. I've done similar loans. Contact me via my Profile page and I'll help you. Kindest regards. Lezli

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Bulelwa

2 years ago

Hi Tess, Parental guarantees are on the increase because of affordability issues in Australia. You all need to go into it with your eyes wide open. The best way to do that would be to consult with property lawyers beforehand. They will explain the different types of guarantees you get into. In particular, how to make sure you are really in a genuine limited guarantee and not exposed for the full amount if your children are unable to meet their obligations. They would also be able to explain how selling your property impacts the contract. It is money well spent and you can then use them for conveyancing to ensure the contract reflects your intentions. Whilst it is possible nowadays to do a loan from anywhere, this is one case where it will be better to deal with a local Victorian broker who will be able to liaise with your legal team. Good Luck Tess. Bulelwa Freer

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Allan

2 years ago

Hi Tess, thanks for question and it's good that your asking these questions at this stage as becoming a guarantor for a family member needs serious consideration, hence the reason that most lenders ask the guarantor to obtain independent legal advice. Usually the property that your daughter will purchase will be used up to 80% of it's value as security for the loan. Your property would be used for the remaining 20% of the purchase price plus costs (govt fees etc). Your property will not be released as security until the loan decreases sufficiently and/or the new property increases in value sufficiently to allow this to happen. Sometimes this means that they may incur mortgage insurance if your daughter's loan is still above 80% of the property valuation. Therefore it would very much depend on how far down the track that you would consider selling your property and where the loan sits at that particular time. I have several lenders that operate within this space & I am happy to answer any other concerns that you may have. I am based in Victoria & can be contacted via my profile which is: https://www.hashching.com.au/author/Allan-S1GajYXQfUh6IPCOe6gsYbkKmUyTjigCp_~~_1jbjqu_~_qU= Regards Allan

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Viktor

2 years ago

Tess, Two approaches to this solution. You can be security guarantor (that is providing the equity in your home) to fund the gap in the purchase of the property. The second is you refinance the equity and gift the funds, subject to 5% genuine savings rule being satisfied with some lenders. The former is relying on them being able to prove servicability for the full loan amount across both assets (yours and the purchased property). The latter is based on two separate loans, one in your name and the second loan in theirs. The approach best suited to the situation is based on the overall understanding of your objectives and limits in resources available. Here to help: More flexible than a bank; Faster finance than going direct. mybr****.au

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