Who Guarantor Loans Are Suitable For
Guarantor loans may be suitable if you:
- Are a first home buyer with limited savings
- Want to avoid paying lenders mortgage insurance
- Have family willing to support your purchase
- Want to enter the property market sooner
- Need to increase your borrowing capacity
How Guarantor Loans Work
With a guarantor loan, the borrower takes out the home loan while the guarantor provides additional security.
The process typically involves:
- You apply for a home loan
- The lender assesses both you and the guarantor
- The guarantor offers equity in their property
- The loan is approved using both properties as security
In many cases, the guarantee only covers a portion of the loan, such as the deposit or LMI component.
Once enough equity is built, the guarantor can often be removed from the loan.
We help you structure the loan correctly so the guarantee is limited and can be removed as soon as possible.
Who Can Be a Guarantor?
Most lenders require the guarantor to be a close family member.
Common options include:
- Parents
- Step-parents
- Grandparents
- Siblings
The guarantor typically needs:
- Sufficient equity in their property
- A stable financial position
- Willingness to take on legal obligations
Lenders usually require guarantors to obtain independent legal advice before proceeding.
How Much Can You Borrow?
Borrowing capacity depends on both your financial position and the guarantor’s equity.
Lenders will assess:
- Your income and expenses
- Credit history
- Property value
- Available equity from the guarantor
Some borrowers may be able to purchase with little or no deposit depending on the structure.
We assess your situation upfront and help determine how much you may be able to borrow.
Risks and Considerations
Guarantor loans involve responsibilities for both the borrower and the guarantor.
Key considerations include:
- The guarantor is responsible for the guaranteed portion if repayments are not met
- The guarantor’s borrowing capacity may be affected
- The guarantor’s property is used as security
- Legal obligations must be clearly understood
We help both parties understand the risks and structure the loan to minimise exposure.
Can a Guarantor Be Removed?
Yes, in many cases the guarantor can be removed once sufficient equity is built.
This may happen when:
- The loan balance reduces
- The property value increases
- The loan-to-value ratio improves
The loan can then be refinanced or restructured to remove the guarantor.
We help you plan an exit strategy from the beginning so the guarantee is not in place longer than necessary.
How the Guarantor Loan Process Works
Applying for a guarantor loan involves multiple steps.
These include:
- Assessing your borrowing capacity
- Reviewing the guarantor’s equity
- Comparing lenders
- Submitting the application
- Legal advice for the guarantor
- Approval and settlement
Our team manages this process with you to ensure everything is structured correctly from the start.
How We Help With Guarantor Loans in Perth
As a mortgage broker in Perth, we help borrowers and families understand how guarantor loans work and compare lenders that offer this type of loan.
Our team helps with:
- Compare guarantor loan options across multiple lenders
- Structure the loan to minimise risk
- Assess borrowing capacity and equity
- Guide both parties through requirements
- Manage the application process through to approval
With access to multiple lenders, we help you secure a loan that supports your property goals.
Speak With Our Team About Guarantor Loans in Perth
If you are considering a guarantor or family assist loan, it is important to structure it correctly from the beginning.
Speak with our team today to explore guarantor loan options in Perth and find a solution that suits your situation.