Saving for a 20% deposit in the current property market is no small feat for our younger generation. What if they only needed to save a 5% deposit and used a parent’s property as security to save them having to pay Lender’s Mortgage Insurance (LMI) on top of their loan?
Launch Finance has access to a unique option whereby first homebuyers can save thousands of dollars on LMI by utilising their parents’ home as security to guarantee the loan and reduce the LVR.
Say for example a young woman wants to purchase a property which costs $400,000 and has a $20,000 deposit, therefore meaning she will need to borrow $380,000. This loan has a current LVR of 95% and would be subject to LMI.
If a member of this woman’s family agreed to act as a guarantor for her home loan, using the existing equity in their own home as security, the LVR would reduce to under the 80% threshold and would save the woman approximately $11,600 in Lender’s Mortgage Insurance.
This option is a great avenue for young homebuyers who aren’t able to save the full 20% deposit require to avoid LMI but have parents who are willing to support them as guarantors.
Speak to a Launch Broker today for more information on this package.