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  • Profile photo of jhk2770jhk2770
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    @jhk2770
    Join Date: 2008
    Post Count: 57

    Can someone tell me whether a guarantor can be a business partner or friend?  I'm told its got to be family!  If so, what criteria do lenders place on a guarantor who is business partner or friend?  What sort of equity do lenders look for in a guarantors property?  Do you need full docs?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Yes a guarantor can be a business partner but in saying this the lender would expect their to be some financial or beneficial interest in the provision of the guarantee.

    I am not sure I would want to offer my property as guarantee for my business partners home loan but everyone to their own.

    If your partner is providing security by way of guarantee then most lenders would also want to have his first mortgage.

    Yes you need to go full doc as otherwise it defeats the purpose.

    Richard Taylor | Australia's leading private lender

    Profile photo of john_ijohn_i
    Member
    @john_i
    Join Date: 2009
    Post Count: 5

    Generally it is not possible to get a guarantor loan with the use of low doc.  But there is a way in some instances to do this.  What one should do is have the guarantor take a loan on their property, and lend it to you.  This money loaned can be used as deposit.  This means that your guarantor will be borrowing 20% of the loan while you borrow the final 80%.

    Hope this helps!

    Cheers!

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    John just to qualify the point you made in that case the parents are not guarantors but now borrowers.

    Also neither of the mortgage insurers will accept a 80% lodoc loan where the 20% deposit has been borrowed or gifted.

    Richard Taylor | Australia's leading private lender

    Profile photo of karen hudsonkaren hudson
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    @karen-hudson
    Join Date: 2009
    Post Count: 3

    Use of a guarantor does not ensure that a loan application will go through, because the guarantor is considered part of the loan application, and his or her credit will be evaluated along with the other applicants. If the lending institution feels that the guarantor cannot make good on the debt, they will not approve the loan. When seeking out a guarantor, it is important to keep this in mind.

    Profile photo of karen hudsonkaren hudson
    Member
    @karen-hudson
    Join Date: 2009
    Post Count: 3

    Use of a guarantor does not ensure that a loan application will go through, because the guarantor is considered part of the loan application, and his or her credit will be evaluated along with the other applicants. If the lending institution feels that the guarantor cannot make good on the debt, they will not approve the loan. When seeking out a guarantor, it is important to keep this in mind.

    Profile photo of pobrien3pobrien3
    Member
    @pobrien3
    Join Date: 2009
    Post Count: 2

    Most of the lenders will require the guarantor to be a family member but CBA will allow non family members on a case by case basis. Full doc only. Overall LVR needs to be less than 80%.

    Cheers

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    One way around this is to buy in a trust with the guarantor a beneficiary – may not suit your circumstances tho.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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