Guarantor home loan Commonwealth Bank
Have you Considered a Guarantor Home Loan from the Commonwealth Bank?
Are you looking for a guarantor home loan? The Commonwealth Bank offers this type of loan, and it might be a faster way to realise your dream of home ownership. With a guarantor, you might not need a deposit, or you might be able to borrow more than you would if you applied on your own.
How does it work?
With a guarantor home loan from the Commonwealth Bank, a family member provides a form of security for your loan by putting up a cash sum, or by offering the equity in their property.
The good news is that if you have a guarantor, you will generally not be required to take out lenders mortgage insurance, which can also help you save a little bit extra on borrowing costs. All of this makes it easier for you to stop renting and enter the property market as an owner as soon as possible.
What are the criteria for this loan?
As with any loan, there are basic lending criteria that you must fulfil. It varies from lender to lender, but these are common eligibility criteria:
- Employment. You need to demonstrate a steady employment record, and you should be outside of your probationary period if you are in a new job.
- Credit. You should have a clean, solid credit history with no defaults, or fully repaid defaults if there are any in your credit history.
- Property type. The property you are buying should be a residential property, rather than a commercial property.
- Steady income. Borrowers need to demonstrate a steady income stream that is sufficient to help them cover cost of living expenses in addition to their monthly repayments for the mortgage.
- Net assets. Your net asset position should be positive. The totality of your assets should exceed your liabilities.
Who can be my guarantor?
Guarantors for a guarantor home loan usually need to be immediate family members of the borrower. So your guarantor should be a brother, sister, or parent. Cousins and close friends are usually not acceptable.
In addition, your guarantor should have a clean credit history, and own property in Australia if they are using equity rather than cash to secure your loan. They usually need to hold sufficient equity in that property to cover around 20% or more of your property purchase price.
What are the advantages in taking out this type of loan?
The main benefit is that you will not need to save up for months or years for a solid deposit. With a guarantor, you can skip the need for a deposit and usually borrow up to 105% of the purchase price. Because you can borrow up to 105%, you might be able to pay for expenses such as stamp duty and conveyancing fees through your loan. This enables you to enter the property market as soon as possible, which is ideal if you are paying a lot in rent.
How can I apply for a guarantor home loan from the Commonwealth Bank?
If you are interested in applying for a guarantor home loan from the Commonwealth Bank, contact ABC Mortgages today for a free discussion. We can provide you with an assessment of your eligibility for this type of loan. Our representatives will be happy to take you through the entire process of applying for the loan.