Guarantor Loans

Discussion in 'Loans & Mortgage Brokers' started by AlphaOB1, 14th Oct, 2019.

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  1. AlphaOB1

    AlphaOB1 Member

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    Does anyone definitively know if the 4 major banks and Macquarie have stopped parent guarantor loans? I have spoken to a few people from two of the majors with different answers. By the way I am only referring to using a parent’s house as security for a home loan not servicing the loan. Otherwise does anyone know of any of the larger lending institutions that still do security guarantor loans? Thanks
     
  2. Property Twins

    Property Twins Mortgage Brokers, Buyers Agents & Mentors Business Member

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    Hi Alpha

    Macquarie don't

    Other majors do

    Are you looking for a 'second mortgage' , as some majors won't do it.
     
  3. Morgs

    Morgs Well-Known Member Business Member

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    The majors do them and each of them take a different approach. Some of them better than others.
     
  4. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Hi Alpha,

    Different lenders have different policies.

    Macquarie stopped doing family guarantees in March but they weren't particularly good at it anyway as they required the guarantor to be able to service the debt.

    St George, Westpac, ANZ, CBA don't require the guarantors to service the loan.

    ANZ are great in terms of the family type guarantors but their restrictions include max LVR 70% (Westpac and STG are 80%) against the guarantors property, only P&I lending is available, max guarantee amount is 50% of the guarantor's property (Westpac and STG are the same).

    With CBA if the guarantor/s are receiving a government pension or unemployed and using the owner occupied property as security then CBA doesn't accept it.

    Westpac and St George and the best all around lenders for parental/family guarantees.

    Bit more restrictions for each lender so just double check your eligibility before you submit anything to the lenders.
     
  5. AlphaOB1

    AlphaOB1 Member

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    Thanks all for the replies. It would be a first mortgage but Macquarie confirmed that they didn't do guarantor loans and the loans officer I spoke to at CBA said the same thing so maybe I need to check with CBA again. Does anyone know NAB's policy on guarantor loans?
     
  6. MC1

    MC1 Well-Known Member

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    Ring Nab
     
  7. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    The NAB also offer family guarantee loans.

    Why don't you simply get a broker to help you. Rather than calling each lender and trying to figure out the most appropriate lender for your needs, go to someone who already knows the various policies.
     
  8. sumterrence

    sumterrence Well-Known Member

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    Nab offer family guarantee only with the parent's investment properties but not the parent's OO.
     
    Terry_w likes this.
  9. AlphaOB1

    AlphaOB1 Member

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    Yes Peter you are right. I should definitely have used a MB for this rather than do all the work myself.
     
  10. AlphaOB1

    AlphaOB1 Member

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    Thanks sumterrence. I also managed to find out from another post that NAB's
    lending policy around their family guarantee loan has changed to the following;
    • The guarantor's property must be an investment property that they own and not their family home.
    • Secondly, NAB is no longer accepting second home buyers, which means investors. If you're a first home buyer, you can still qualify!
    • Finally, the NAB family guarantee only allows you to borrow up to 95% Loan To Value Ratio (LVR) which means you still need a deposit!
     
    sumterrence likes this.
  11. AlphaOB1

    AlphaOB1 Member

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    Just out of curiosity, even though I have already done most of the preliminary work and know which bank I am likely to go with, is there still any benefit from using a MB? Let's say for example I go with WBC and they offer me 4.3% on a IO loan. If I used a MB would the MB still be able to get me the 4.3% rate? Or would the rate be higher as the bank would now need to take into account the commission that the bank has to pay the MB? If the MB can still get me the 4.3% then I assume banks would prefer to deal with applicants directly so they save on the upfront and trailing commission paid to a MB.
     
  12. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Interesting story. About 6 weeks ago I was speaking with a client with an existing Westpac loan. I indicated that the loan had been in place for a while and getting Westpac to reprice the loan would be a good idea. She gave the account details and I put in a pricing request.

    Later that day she emailed me saying not to worry about it, she'd spoken to a friend that works for Westpac and the friend had renegotiated her rates. I told her that's fine, but here's what I'd negotiated if she was still interested. She emailed me back and said I'd gotten an extra 0.2% off what her friend in the branch had offered.


    Broker commissions are factored into the cost of your loan. Branch costs and staff costs are also factored into the cost of your loan. It doesn't matter if you get a loan via a branch or broker; there are costs associated with your loan which ultimately you pay for.

    Also consider that the lenders that don't have a significant branch presence and rely heavily on brokers tend to be about 0.1% to 0.2% cheaper than the lenders that rely heavily on their branches. Furthermore all of the major banks are currently closing branches.


    Lender pricing is fairly opaque and the Treasurer's announcement yesterday that the government is funding an enquiry for the ACCC into this (and other things) is welcome news. Sometimes you do get better results from one channel or the other. What I can say is that if someone has a rate offer in writing from a bank, the worst outcome is brokers can get the same lender to match it. I imagine the people in the branch would say the same thing.
     
  13. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    It may seem that you have done a lot of the work but in reality there is a lot more to it than determining who does guarantor loans and their restrictions.

    There are other elements like borrowing capacity and figuring out which lenders to use first and which to save at a later stage for whatever reason.

    Rate is the same regardless of broker or banker - you really need to ensure you are not frying your credit file with multiple credit enquiries, use the right lenders in the right order depending on what you plan to do in the future, etc.

    Pick a good banker or broker as its free (or rather built into the lender's pricing model) - much more efficient than contacting call centres yourself and relying on their knowledge.
     
    Brady likes this.