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There have been a lot of changes to the way home loan providers lend money in recent years, mostly due to the global financial crisis and the introduction of responsible lending legislation and guidelines.

One of the lending options that was affected was parents (or relatives) offering their personal guarantees to their children (or other relatives).

Lenders do not like to see parents or relatives be guarantors without receiving a real financial benefit in terms of some sort of ownership in the property.

If your son is seeking you to be a guarantor to satisfy the lenders requirements in being able to satisfy the serviceability requirements then unfortunately that is not an available option any more.

If as guarantor you would have some ownership of the property then you may have a better chance of helping your son.

There are however options such as a family pledge loan where the parents will offer their own home as security in addition to the house their son or daughter is buying, to allow the children to enter into a mortgage which they would not be able to obtain without this additional security.

These loans also have strict policy guidelines to meet and if you enter into one you will be required to obtain independent legal advice before the loan is granted.

There are different versions of this product available in the market but you need to be aware of your legal responsibilities which cab extend to the home loan provider expecting you to make repayments if your children default or in the very worst case the sale of your property to clear outstanding debts.

The best advice we can offer is for you and your son to speak to a professional home loan adviser and outline your personal circumstances and let them come up with some options to assist.

Best wishes to you both

Not having a credit rating does not prevent you from obtaining a new home loan. A home loan provider will focus more on your ability to repay the loan based on three key factors.

1. Your current employment situation 2. Your current level of debt & income 3. The amount of money you are able to put into your home purchase.

A home loan provider will want to see that you are in stable employment before they will lend to you. Generally, they will have required you to complete your probationary period which is a potential hurdle for you but even if you are on probation this will not exclude you borrowing for all home loan providers. The home loan provider will also do an income and expenses calculation to ensure you can repay the new loan comfortably.

Finally, the more money you are able to put into the home reduces the risk to the home loan provider. Once you have more than 20% equity in your home it is generally easier to borrow money and issues like being on probation and returning from overseas become less of an issue.

Best of luck

As a result of the global financial crisis home loan providers removed a number of home loan products and varied their policies as they became risk adverse.

Tighter credit policies resulted in the removal of 100% loan to value ratio lending, 95% with no genuine savings. A number of home loan providers tightened their lending policies in relation to the security, income assessment and credit history.

As time has passed providers are now seeking a suitable mix competitive flexible products and policies, while striving to avoid previously perceived issues.

Additionally with the introduction of the National Consumer Credit Protection act last year there is more pressure on providers than ever before to adhere to responsible lending practices and ensuring customers are not placed in an unsuitable loan.

So while we are unlikely to see a return to “very loose and flexible lending guidelines”, providers are always looking to provide the best products and services they can for qualified customers.

Interest rates have been on hold for nearly 12 months now. There are some very attractive fixed rates options now available and the rate you mentioned is very attractive and competitive.

Fixed rates however do come with limitations. You really need to ask questions of your finance manager so that you understand your fixed rate options as well as making sure it is suitable to your needs.

A number of borrowers are quite attracted to what we call a cocktail loan. That is you might choose a part fixed and part variable loan, say 50% fixed and 50% variable. That way you can take advantage of the lower fixed rate and the comfort they provide and combine it with a variable rate option that allows you all the flexibility you need to pay off the loan more quickly.

We hope that we have been able to assist you with your questions.

Best wishes

We are unable to comment on the lending criteria for specific lenders but our suggestion is to always be upfront and honest. It may help if you write a letter explaining that it was a genuine mistake and that you simply failed to remember and disclose the debt.

Some lenders do have a blanket rule that if a customer only discloses a debt after it is queried they are unable to approve the loan. However, most will give a customer the benefit of the doubt if all other aspects of the credit application are ok and the undisclosed loan appears to be a genuine error.

Best of luck with your approval.

The turnaround time from conditional approval to formal approval is dependent on the number of conditions your conditional approval is subject to.

Generally speaking a loan is conditionally approved is subject to a valuation of the property being taken as security. As the valuation is completed by a third party this can take 2-3 days. It is really important to ensure the valuers can obtain immediate access to the property that is being used as security. Not having access can cause unnecessary delays. If the property is an investment property than you need to give the tennant notice so it is advisable to request the real estate agent speaks to the tennants a couple of days in advance of the loan being submitted.

If the conditional approval is subject to the borrower providing additional information then formal approval is dependant upon how quickly the borrow is able to provide the information.

In regards to refinancing your loan all lenders have total discretion over their fees they charge however in relation to government fees you are required to pay a registration fee of approximately $200.00 when you refinance.

We would advise strongly that you check the loan contract of the lender you currently have before refinancing as well as check the loan contract of your new lender to ensure you understanding all the terms and conditions.

We hope this helps.

Veda Advantage is Australia’s largest credit reporting agency which is used by all providers of consumer and commercial credit. Each time you apply for credit the date, amount, type of credit sought and the name of the provider is added to your file. Veda also provides details on whether you have defaulted on any loans, are currently or have been a bankrupt and whether any court actions are pending against you. Providers of consumer finance rely solely on Veda Advantage reports when making their credit decision.

Dunn & Bradstreet are more focused on commercial and business reporting. While they can also provide credit reports on consumers they are used more by business owners who want to extend credit to new customers and need to determine their credit worthiness. Alternatively it can be used by business owners to check the credit worthiness of vendors who want to supply goods and services to their business.

If you are applying for a consumer loan or a real estate mortgage, you should only be concerned about the contents of your Veda report as that is what your credit provider will be relying on.

We hope this information is of assistance.

Best of luck

It is an exciting time to purchase your first property and it is great to see you have such a significant deposit. It is a great benefit when looking to borrow money in today environment.

If we look at your scenario purely based on income a number of lenders unfortunately will not take it into consideration. There are a few and that’s why you should look to engage a home loan professional to help you guide you through the process.

It you are in a position to seek work then it will help your cause if you have been employed for 6 months or more. Developing a track record of earning income combined with the deposit will tremendously enhance your ability to obtain a home loan.

We would advise you speak to a qualified home loan manager to understand your options more clearly – you certainly deserve an opportunity.

Best of luck

As a home loan provider intouch is able offer home loans from $30,000 on some of our products.

We are also able to lend to pensioners, but it would depend on how your income is specifically received.

Traditionally, it is easier to obtain a mortgage for self funded retirees, rather than those on a government pension.

However, it would be great if we could talk to you directly about your situation and offer you some advice more tailored to your specific circumstances.

If you would like to discuss this matter please call on 1300 4878463 and we will direct you to the closest home loan managers

Best wishes

To be honest, this is a fairly unusual scenario that you may find difficult to achieve.

There are a few things that a home loan provider would need to consider in reviewing and assessing such a loan application.

Firstly, you are correct, as your parents are the owners of the land on which you build the home they would need to be on your loan as well. This means that the home loan provider would effectively be secured by two homes on the one title.

These types of loans are traditionally difficult to obtain finance on as the provider will view this as a unique property with a difficult resale value, so even if they agreed to take this as security they would do so at a reduced amount to reduce their risk.

However, the biggest issue you are likely to face is the lack of a direct benefit to your parents by coming on to the loan. Essentially, the credit laws would say that your parents are going on to a mortgage for a property that they are taken on significant risk (would have to repay the loan if something happened to you and you could not pay) and will receive no real financial benefits (they are not living in the home).

While we are not saying you will not be able to achieve all of the above, based on our experience we can advise you it will be difficult and you may have to put a lot of work into finding a suitable home loan provider who can help you.

We suggest you identify an appropriate professional home loan manager to help you through the process of finding a home loan provider.

Best of luck

Congratulations on your savings history and you are certainly in a good position to achieve your dream. Without knowing the specifics of how much the property you are looking to buy is and how much you have saved it is difficult to give you a definitive answer to your question. We would love to be able to talk to you directly to advise you in more specifics.

You say that there is a two month settlement and as you have said you will continue to save and if applicable you can factor in the First Home Owners Grant to your deposit as well. The best way to secure your home is to submit a home loan application for approval. That way you can be credit assessed and counter any potential credit issues that may arise with the ultimate aim of obtaining a formal approval which should secure the home for you.

Again, while it sounds like you should be able to obtain an approval without knowing the specifics we could not confirm that but would love the opportunity to talk to you about the situation further.

Best wishes