Aussie Home Loans has launched a product, Aussie Family Advantage, which the broker said will meet the challenge being faced by young home buyers who need help from their parents in making their first property investment.
Aussie’s managing director and founder John Symond said the new Family Advantage can eliminate the risks of parents losing their own homes if they act as guarantors over their children’s mortgage.
“Many inexperienced young home buyers are taking up loans of up to 100% of the purchase price and during a market downturn or loss of job, the forced sale of the property can create financial stresses which can lead to marriage breakdowns.
“With Aussie Family Advantage, the young owners have genuine equity in the property – with the help of their parents – which can avoid the situation where debt exceeds the property value and can lead to the loss of the property,” he added.
The new product allows parents to commit to a pre-set mortgage amount, without placing their own homes and other assets at risk, as was required previously.
“Risking the parents’ homes is no longer necessary. Now with Aussie Family Advantage and similar products now in the market, parents can commit to a set amount of money to help their kids get into property and minimise their risk,” he added.
Aussie Family Advantage allows the buyer to borrow up to 110% of the purchase price and applies to purchases of owner-occupied or investment properties, but no re-financing.
The pre-set mortgage amount over the parents’ property brings the final loan to valuation ratio to a maximum of 85%.
“Parents can now be protected in setting a maximum limit on their exposure to their kids’ mortgage, providing them with security, as well as the satisfaction in helping their kids purchase their home, apartment or investment property,” Symond concluded.
Aussie Home Loans was recently voted Australia’s Best Mortgage Broker.
By Nelson Yap
