Will being a Guarantor help in this situation?

Discussion in 'Loans & Mortgage Brokers' started by jaybean, 11th Jan, 2016.

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  1. jaybean

    jaybean Well-Known Member

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    The basic summary is: a family member just got a part-time job and is anxious to purchase something. However most banks need at least 6 months of an employment history behind them.

    If I were a guarantor, would this offset the need for a history? Or are guarantors used for a completely different purpose. Sorry if this seems like a stupid question...
     
    jaybean, 11th Jan, 2016
    #1
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Sounds like he needs an income guarantor which generally can only be a spouse.
     
    Terry_w, 11th Jan, 2016
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  3. jaybean

    jaybean Well-Known Member

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    Gotcha thanks
     
    jaybean, 11th Jan, 2016
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  4. Corey Batt

    Corey Batt Well-Known Member

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    There's plenty of lenders which will accept shorter employment time frames, as low as 1 day on the job. Guarantor isn't necessary for this deal and wouldn't be relevant.
     
    Corey Batt, 11th Jan, 2016
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  5. Redom

    Redom Mortgage Broker Business Plus Member

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    Generally with borrowing you need a couple major parts:

    1. Borrowing power. For this you need income that can be used, e.g. salary, rent, etc. Your employment terms will matter here.

    2. Deposits. What your contributing to the purchase, either through security/equity or savings.

    Guarantors (excluding spousal ones) usually provide the bank additional security. They are provided to meet the deposit component. They usually come from parents, particularly for FHBs, who are generally healthy on the borrowing power metric but don't have the deposit available.

    In terms of your scenario, employment and income generally are required to demonstrate borrowing power, not deposits.

    The good news is that there are lending options with 1 day employment, or even lending based on a signed contract to begin employment in the near future (for a strong deal) - so there's no need for a guarantor in this instance.

    In terms of guarantors for borrowing power - i think ANZ have some fancy offer available if your friends parents are very high income/net worth individuals. To my knowledge their the only ones with such an offer.

    Cheers,
    Redom
     
    Redom, 11th Jan, 2016
    #5