Family Pledge Loans
Allows applicants to maximise the amount they can borrow against their purchase property by offering them an alternative source of funds for their deposit and upfront fees.
Instead of an applicant funding the deposit and upfront fees with their own cash, family members (parents, grandparents and siblings) can provided part or all of the deposit by offering equity from their own property as a limited guarantee.
The key benefits for the applicant are:
Maximise the amount borrowed - allow greater than 100% of the purchase price, plus costs such as Stamp Duty and Legal Fees.
Helps to reduce or avoid Lenders Mortgage Insurance premium.
The benefits for the Guarantor are:
Allows the guarantor to nominate a specific amount the guarantee is limited to, rather than a traditional 'open' guarantee for the entire loan amount.
The guarantor can release the guarantee at any time, as long as the Loan to Valuation Ratio (LVR) is reduced to 80%. The LVR can be higher, but LMI will still apply.