Family help: gifts and guarantees
Getting a hand from family?
Family can help in two main ways. A gift adds to your deposit and isn't repaid. A family guarantee uses part of a family member's property as extra security, so you can borrow with a smaller deposit. Guarantors take on real risk, so they should get independent legal advice before signing.
Who it suits
- First-home buyers with a small deposit
- Parents helping adult children
- Buyers who can afford repayments but lack a deposit
What lenders look at
- Whether the gift is genuinely non-repayable
- The guarantor's equity and circumstances
- Your own ability to make the repayments
- How much of the loan the guarantee covers
What to prepare
Tick them off as you go.
Questions to ask
- Can the guarantee be limited to a set amount?
- How and when can the guarantee be released?
- Does the gift need to be in my account for a time?
- What happens to the guarantor if I can't pay?
Everyone's situation is different. Lenders weigh things differently and small details change the answer. An adviser can tell you where you stand with family help: gifts and guarantees and what to do next.
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