Guarantor home loan NAB
Obtaining a Guarantor Home Loan: NAB
If you want to buy a home and you don’t have a deposit, it might be worth considering a guarantor home loan. The NAB offers this kind of home loan, which can be an excellent option if you don’t have savings, and you want to get a foot on the property ladder.
How a guarantor home loan works
A guarantor home loan is a type of loan that eliminates the need for a deposit. Instead, a guarantor covers the cost of the deposit on your behalf, putting up either cash or equity into their own home to secure your loan. A guarantor generally needs to have sufficient cash or equity in their property to cover at least 20% of the purchase price of the property you want to buy. So, if you are buying a $500,000 property, your guarantor needs to have at least $100,000 available to secure your loan for you.
Eligibility: borrowers and guarantors
As a borrower, you are subject to a number of different eligibility requirements:
- You need to have a strong, clean credit history with no major defaults. If you have defaults, they usually need to have been repaid in full before the lender will consider lending to you.
- You need to demonstrate sufficient income to make the required repayments.
- In addition to a strong credit history and sufficient income, you should demonstrate that you have a positive asset position, whereby the total value of your assets is greater than the total value of your liabilities.
- The lender will generally mandate that the property you buy is a residential rather than a commercial property.
Once you fulfil the basic eligibility requirements as a borrower, you need to make sure that your guarantor also meets several eligibility requirements. The guarantor should be an immediate family member, who has a clean credit history. They should have enough cash, or equity in their own property to cover 20% of the purchase price of your property. If your guarantor is using equity to secure your loan, the property must be in Australia.
Covering additional costs
As you can usually borrow up to 105% of your property price with type of loan, you might also be able to cover other expenses, such as stamp duty and conveyancing or legal costs, with your loan.
Key benefits and additional features
The key advantage in opting for a guarantor home loan from the NAB is that you will not need to wait years or months to save up for a deposit. You can start the search for your dream home right away.
Furthermore, with a guarantor you will bypass the lenders mortgage insurance requirement, which will help you save more on the costs associated with borrowing, and buying your home.
As with any other type of home loan, you can opt for a variable or fixed rate. You can add other features to get the most out of your loan. For example, you can add an offset account or a redraw facility, and perhaps other types of options to ensure that your home loan product matches your specific requirements.
Applying for a guarantor home loan from the NAB
To get started with the process of applying for a guarantor home loan from the NAB, contact ABC Mortgages. We can take you through the entire process of preparing the paperwork, to making sure that you and your guarantor are eligible. Call us today for a free consultation on how you can enter the property market sooner rather than later.