ATTENTION First Time Home Buyers – Your Parents Can Now Help!

Are you a first time home buyers struggling to saving for a deposit for a home loan? If this is the case often by the time you have saved up, house prices have increased? GREAT NEWS!!!! Parents can now lend a helping hand.


So, how do parents help their kids with a home loan?

Good news for those entering the housing market and their parents would like to help give them a helping hand. Home ownership for Australians is still one of the big dreams on their horizon, though some of the new young entrants journey ahead maybe a little hard with saving the large deposit and meeting the stamp duty plus solicitors fees.

Specialised lenders have a new system appropriately named the “Family Pledge” designed to help their family members enter the home buyers’ market. The Lenders policy enables a parent to pledge a portion of their children’s new home loan, not the entire Loan, which could have severely restricted the parent’s future if the full loan was guaranteed.


As an example, the house purchase is $400,000 with a Family Pledge of 25% ($100,000). The lender will secure the new house purchase with a mortgage along with an $100,000 mortgage (can be a second Mortgage in some circumstances) over the parent’s property. Home loan is now $400,000 or less if a deposit is added.

This model helps to eliminate the need for possible Lenders Mortgage Insurance when the loan is greater than 80% of the property values. This example is subject to conditions by the selected Lender and needs to be assessed on its merits, especially loan serviceability, personal needs and Genuine Savings of 5% being normally required.


This process can be a little confusing for borrowers, so come and see Judge Lending to help guide you through this new product and policy.