Family Equity Home Loan

Family Equity Home Loan products have been designed to help people with stable employment, a sound rental record, clear credit history, and a clearly defined ability to service debt, to purchase a home with little or no deposit.  Here’s an example of how it works:-

John (28) and Betty (25) both work full time. John has been in stable employment for 5 years and earns $70,000 p.a. Betty has also been in stable employment for the past 3 years and earns $55,000 p.a.   They both qualify for the First Home Owners Grant and have located a property they would like to buy for $400,000.  Here's how the team at RCR Finance helped them achieve their dream

John & Betty's income was sufficient to qualify for a loan of $420,000, however as John & Betty didn't have much money saved, they didn't qualify for Mortgage Insurance, and hence the maximum they could borrow was only 80% of the value of the property they wanted to buy - $320,000.

A Family Equity Loan allowed John & Betty to borrow the additional $100,000 they needed by using equity in property owned by Robert's parents as supporting security. John parents Bill (58) and Jean (56) provided a guarantee supported by a mortgage over one of their investment properties for $100,000 to cover the shortfall.

With some help from John's parents, John and Betty were able to secure their home, by demonstrating a stable employment history and income to service their loan, even though they had not saved a deposit themselves.

The mortgage over John's parents property can later be released by the lender once the value of John's and Betty's home increases to $432,000 which would see the Home Loan representing 95% of valuation.  

To speak with one of our consultants about a Family Equity Loan please CLICK HERE