Are you looking to get approval for a home loan, but don’t have enough funds to complete the purchase or meet a serviceability requirement?

A security and serviceability guarantee loan may be the right loan package for you!

This type of guarantee can provide you with the support you need to get approval for a home loan.

However, your ability to get approval depends on the bank or lender that you apply with.

Please read on to find out whether you are eligible to apply for this type of loan.

What is a security and serviceability guarantee?

A security and serviceability guarantee arrangement involves the guarantor providing their property as security for the borrowers loan.

As well as this, they pledge to use their income to cover any loan repayments that the borrower cannot make.

By combining both a security guarantee and serviceability guarantee, the banks are protected from any risk of default by the borrower.

How much can I borrow?

If you have the support of a security and serviceability guarantee, you will be eligible to borrow up to 100% of the purchase price.

This means that you do not have to provide the bank with a deposit, or pay Lenders Mortgage Insurance (LMI).

You may also be eligible for other special discounts and cheap interest rates. Please speak to us today for more information.

Who can become a guarantor?

Most banks prefer that the guarantor is closely related to the borrowers. Typically, the types of relationships that are acceptable include:

• Spouse.
• Parents.
• Sibling.
• Director of a company, guaranteeing a company loan.
• Director or beneficiary of a trust, guaranteeing a trust loan.

If you are in one of the above relationships you may be able to provide the borrower with a guarantee for their loan.

When is a serviceability and security guarantee used?

There are a variety of circumstances when this loan type may be suitable.

Generally, it is most appropriate when a student (over 18 yrs old) wishes to buy a property, but does not have a large enough income to cover the loan.

However, they are still able to get approval with the help of their parents who offer their property as security.

This minimises the banks risk of lending to someone who is not yet able to service the loan.

In conjunction with this, some banks require the parent’s to provide a guarantee that they will use their income to help the borrower repay the loan.

This provides the bank with added reassurance.

To find out more about the banks requirements, please call us on 1300 399 056 or enquire online today.

Requirements for a serviceability and security guarantee

Because of the risk associated with this type of arrangement, most lenders have strict criteria that guarantors must meet.

It is not enough that you have the requisite relationship. Person’s that are guaranteeing the loan of a borrower must:

• Be in an excellent financial position.
• Confirm they are aware that they will be required to make the repayments on the loan.
• Have a stable relationship with the borrower.

If this criteria is met then the borrower may be able to borrow up to 100% of the purchase price!

Contact us today!

Thinking of applying for a serviceability and security guarantee? Speak to us today! We can assess your individual situation and help you determine which lenders will approve your guarantor loan.

To get the best loan package around please call us on 1300 399 056 or enquire online and one of our expert mortgage brokers will call you back to discuss your situation.