Thanks for the post. So is it that I need to go on title and be one of the borrowers with future borrowing capacity reduced by the full loan amount. Are there any better ways?

I’m sure I heard of husband as guarantor for wife, and parents as guarantor for their children a few years back or do lenders generally don’t allow this anymore since the financial crisis.

Do I need to save the whole 5% in only 3 months. It will take closer to 6 months to save 5%

Do you find out whether a new application is required at the beginning, i.e. is it shown on the loan docs what the process is or do you find out at the end of the IO period?

In the beginning, which period is usually most commonly on offer or which period is not difficult to get approval for, would it be 5, 10 or 15 years?

What would happen if the loan is not approved at the end of the IO period, forced to sell?

Can the loan be converted to P&I during the IO period without loan approval?

If you start with IO for more leverage then convert to P&I during the IO period, would that be ok?

• This reply was modified 10 years, 5 months ago by  magic32.
• This reply was modified 10 years, 5 months ago by  magic32.

Hi,
Thanks for the input guys.

Just to clarify, the account is a savings/everyday transaction account for things such as wages and day to day expenses and atm withdrawals , not linked to any loan. And as I already have this type of account with another bank.

E.g. if I were to apply for a home loan for property investing in the future with SGB, CBA, or ANZ or  would it make any difference in terms of approval or loan amount. It would be a first ever loan, if not then I would close it so that I do not need to pay monthly bank fees. I guess the other way to look at it is that it would probably not matter, since there would a lot of lender out there via use of a mortgage broker, and so it might not necessarily be one of the banks that I eventually get a loan with.

Would it be possible to get closer to 80% LVR on the basis of the guarantor alone, or is it generally limited to 20%?

Also, if the guarantor guarantees a loan, and next time they wish to borrow for another property, is the repayments (20% or 100%???) of this property part of the calculation for their cash flow/liabilities when applying for another loan?

For the cross guarantee, is it a second mortgage on the guarantor's property? That would have first mortgage consent issues. If the guarantor's property is free and clear, then first mortgage over that could be done. But it is probably better as Qld007 said to have them gift me 20% or 80% instead from cash or equity (and I repay over a number of years).

Thanks for your replies everyone.

Currently I don’t have enough deposit nor borrowing capacity since I am working part time.

My parents can take some equity out of their existing property/redraw from their loan to help me make up the rest of the 20%. And they simply just draw a cheque and pay for it on settlement, or do they need to put that money into my savings account first, and then I draw the cheque?

However, I still don’t have the borrowing power to be able to get the other 80%.

QLDS007 said “If it is for security purposes then would be no real problem as the family pledge style loan is fairly active and their guarantee would normally be limited to 20% of the purchase price.”

But I will need them to guarantee the 80% (less what ever I can borrow myself). How do I go about doing this?

Basically I only want my name on the title for FHOG, and therefore only my name on the loan if possible. If my parent’s name is on the loan as well, then the lender would want my parents to be on title as well right? At least 1% share on the title I think.