More first home buyers are getting family guarante
More parents and other family members are guaranteeing first home loans for their children according to National Australia Bank.
The proportion of first home buyers getting approved for a home loan with a family guarantee has gone up to 6.7 per cent now from 4.8 per cent in 2010.
A family guarantee can allow a first home buyer with a small deposit to secure a home loan. Often a guarantee is used to avoid the cost of mortgage insurance. The guarantor must accept that their own assets may be ultimately on the line if the borrowers defaults.
Source: The Age