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The pros and cons of Family Guarantee loans

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For many young Australians, home ownership may be harder to attain compared to previous generations. Many Australians are putting off buying their first home until later in life, while the overall home ownership rates across the nation have been dropping since the mid-1990's1. It seems like a grim scenario, but there are still solutions available - and it isn't just a matter of saving more or for longer for a larger deposit.

What is a family guarantee?

With IMB Bank home loans a Family Guarantee could help you enter the market. It can allow your family to help you purchase a property by acting as guarantors, making it possible to get into your home sooner without having to spend further years saving for a deposit. By offering either their own home or a term deposit held by IMB Bank as security, family members can help borrowers avoid lender's mortgage insurance and enable a lower interest rate.

However, just like all lending products, it is best to know the full picture before you commit. Read on to see if a Family Guarantee could be right for you.

  What are some potential advantages?
  What are some potential disadvantages?

In summary

Overall, a Family Guarantee could help make your way into your first or next home. By increasing the value of security provided against the loan, the requirement to save enough money to eliminate the additional cost of Lender’s Mortgage Insurance, a significant difficulty faced by first home buyers today2.

For more information on Family Guarantee options, get in touch with the team here at IMB Bank; and remember, when dealing with loan agreements, seek appropriate legal advice before signing on the dotted line.

Make an enquiry

 

Source:

1 - Australian Institute of Health and Welfare, Australia's welfare 2015

2 - First Home Buyers Australia, 2016 National First Home Buyer Report

MoneySmart

Why choose IMB Bank?

Established in 1880, IMB has been helping people achieve their financial goals for 138 years. IMB offers a full range of banking solutions including home and personal lending, savings and transaction accounts, term deposits, business banking, financial planning and can arrange a wide range of insurance and travel products.

IMB has a growing branch network throughout the Illawarra, Sydney, NSW South Coast, the ACT and Melbourne. We have a lending specialist in every branch and a team of mobile lending specialists who will come to you. IMB members enjoy access to free automated phone and internet banking and a team of professionals who are just a phone call away at our locally based call centre.

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