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Aussie Family Advantage For First Home Buyers
Aussie Home Loans
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The ever-increasing cost of living, including booms in house prices and the rising cost of renting, means that many would-be home buyers are being priced out of the market.
All hope is not lost, however; as many banks and lenders are finding solutions for this group of potential customers. For example, to entice first home-buyers into the property marketplace, Aussie have developed a financial solution known as Family Advantage.
First home-buyers with a reliable income but who have little or no savings may be eligible for Aussie Family Advantage. How does it work? If a parent, family member of friend is able to offer part of their own property as security, Aussie are able to lend up to 110% of the value of the property to the new home buyer. The maximum loan amount with Aussie Family Advantage ranges from $400,000 to $700,000, depending on the value and location of the property.
Aussie Family Advantage works by having the borrower's parents or family member act as guarantor, and offering a portion of their own home equity to bring the borrower's Loan to Valuation Rate (LVR) to a maximum of 85%.
Products such as Aussie Family Advantage can be useful in getting new home-buyers started on the property ladder, but they do attract a degree of risk. While the borrower is responsible for making repayments on the loan, the guarantor is putting their own home at risk. If the value of the borrower's property falls, or the borrower is not able to make repayments and is forced to sell their home, the guarantor could have to cover some of the shortfall, depending on how much of their own property they pledged.
If you are considering applying for a home loan solution such as Aussie Family Advantage, you should be certain that you can afford to make regular home loan repayments first. You also need to bear in mind that some form of savings would be beneficial in the purchase of your new house, as apart from the purchase price, you may also need to cover taxes, government charges and estate agents fees, not to mention the costs of furnishings and fittings for your new home.
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