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What is a Family Guarantee on a Home Loan?

IMB’s Family Guarantee allows home buyers (especially first home buyers) to enter the property market sooner. A Family Guarantee allows family to assist their children in the purchase of a property without actually providing a cash gift or cash loan. It could also allow borrowers to include some of the costs of purchasing, such as stamp duty and legal costs in the loan amount.

Under IMB’s Family Guarantee, the borrower (generally a first home buyer) receives assistance from an immediate family member(s), who provides additional security to cover the difference between the amount of the borrower’s savings and the maximum loan amount that IMB will usually lend without lender’s mortgage insurance, which is 80% of the value of the property being purchased. This additional security provided by the family member is provided in the form of a limited guarantee secured by a residential property owned by the family member, or secured by a Term Deposit lodged with IMB by the family member.

Another option for borrowers with less than 20% deposit is the Home Guarantee Scheme which assist first home buyers and single parents purchase a home with as little as 5% deposit, while not paying the Lenders Mortgage Insurance.

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