Do I Need A Guarantor To Buy A Home?
You’ve heard the term ‘guarantor’ thrown around a bit, and you’re not sure if you need one to buy a home. You’re not exactly sure what it is for that matter. Let’s dive in and find out exactly what a guarantor is, who can be one, and if you need a guarantor to buy a home.
What exactly is it?
A guarantor is a person that co-signs your loan and pledges their assets, making a commitment to the lender that if you don’t pay your mortgage, they will. It’s a pretty big responsibility and not something that should be taken lightly. If you get a guarantor for a loan, it’s a good idea to have a really good think about if you will be able to afford to make your mortgage repayments. If you don’t, it will seriously impact your chosen person, and their financial future.
Can anyone be one?
Yes, in terms of not needing to be a relative, although the banks will take the relationship into consideration. To qualify as a guarantor, there are some financial requirements. The guarantor has to have enough assets to meet the lender’s conditions. The lender needs to know that they will have enough money or assets to pay them if you don’t. They will need to have enough equity in their home to meet the requirements, and may also need a stable income. Every lender is different.
Do I need a guarantor to buy a home?
You do not need to have a guarantor the buy a home, this is only necessary if you yourself can’t meet the full loan requirements. The same goes for building a home through First Home Hero, you just need to meet the normal requirements to be able to use our service. A benefit to using our service though is that you may only need a small deposit. Our program can get you up to $30,000 towards your first home. $15,000 from us and $15,000 for the government for QLD first home buyers.
Ready to apply? Fill out this form.