Hi, I'm new to this forum and would love some advice on finding the right guarantor loan for us. My husband is currently working with a mortage broker to try and get us a loan using his parents as guarantors (as we have no deposit) but there is a problem in that although his parents have a lot of equity in their home they are not currently working (his dad paid out his loan using his super) then has taken out a 100,000 loan on his equity already to buy a motor home. The bank won't accept them as guarantors as my husbands dad is in between jobs, and his mum is self employed and only works a few days a week. It seems as if we have limited options left. My husband is a registered nurse currently earning approx $70,000 (although his base rate which they go on is about 10,000 less) and I'm at home with our two kids with around $400 from centrelink a fortnight.
I would love to know if there is any way around this. Ta
Rina

Hi Rina,

It sounds like you need a lender that can accept a guarantor loan with these credit issues:

* Must be able to accept a guarantor who is not working.
* Must be able to take a 2nd mortgage behind another financial institution.
* Ideally the option to limit the guarantee to reduce your husband's parents risks.

I believe we should be able to help you with this without any problems. It is just a matter of applying with a lender that can accept the above criteria.

Our mortgage brokers have all worked for the banks as the person who makes the decision to approve or decline a loan. Because of this they have an in depth understanding of credit, and how to help good people in difficult situations to get a loan. Please give us a call on 1300 889 743.

Thanks

_________________
Otto Dargan
Mortgage Broker
Ph: 1300 889 743
The Home Loan Experts

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• Credit Score Calculator: Do the banks see you as a high risk borrower?
• LMI Calculator: Do you qualify for discounted LMI?
• Genuine Savings: The biggest hurdle for first home buyers.
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Hi Rina,

I can't advise you about which bank to use, but I can tell you who not to go through. Don't waste your time with the NAB. My partner and I recently applied for a NAB homeloan and had a guarantor. The guarantor was my partner's parents, who had an investment property (valued at approx $300k) with clear title. We have a combined income of over $150k and with the guarantee we were still refused a home loan by the NAB. We found them atrocious to deal with and were left wondering, who can actually get approved for a loan.

Cheers,
Courtney

Hi Rina,

Yes banks can be like that sometimes. Often the loan officers working for the banks simply don't know their own policy so submit loans that are outside of their guidelines. It is likely that there was some small area of NAB policy that caused the problem, likely something that they cannot override.

We regularly get calls from people who were declined for a guarantor loan for silly reasons. Banks are concerned that with new legislation coming in that they are exposed to legal action if they do not very carefully assess applications, particularly if a third party such as a guarantor is at risk too.

The legislation is meant to protect the public from loose credit standards however the reality is that many people who are a low risk cannot get a loan because the lender is worried that they cannot prove without a doubt that the legislation's requirements are being met.

The name of the game at the moment is knowing which lender to apply with.

_________________
Otto Dargan
Mortgage Broker
Ph: 1300 889 743
The Home Loan Experts

Our most popular pages:

• Credit Score Calculator: Do the banks see you as a high risk borrower?
• LMI Calculator: Do you qualify for discounted LMI?
• Genuine Savings: The biggest hurdle for first home buyers.
• Employment letter, Accountant letter & Gift letter templates

I got a biggest problem while applying for a loan, is the earnings or I can say inappropriate savings that dont matches the requirement and just due to this reason the rejection I have to face.

This is the awkward situation I have to deal with but, I think, Guarantor loan, can help me to come out of such situation.

Hi Rina,

The banks are legally unable to lend to vulnerable guarantors. The areas they focus on when determining if someone is a vulnerable guarantor include:

1. If they are reliant on any form of super or pension etc (sounds like your father is retired).
2. If the property offered is their owner occupied home

It sounds like your parents fall in both categories which will prevent the majors from being able to assist.

The definition of a vulnerable guarantor varies depending on the lender. There are some major lenders that can consider retired people using their home as security for a guarantee. In our office we always discuss the nature of a guarantee with the guarantor and recommend that they seek legal advice before proceeding.

Just because a banks policy allows pensioners as a guarantor that doesn't mean that we will just ignore our own responsible lending obligations. It is very much a case by case basis with these types of guarantees.

_________________
Otto Dargan
Mortgage Broker
Ph: 1300 889 743
The Home Loan Experts

Our most popular pages:

• Credit Score Calculator: Do the banks see you as a high risk borrower?
• LMI Calculator: Do you qualify for discounted LMI?
• Genuine Savings: The biggest hurdle for first home buyers.
• Employment letter, Accountant letter & Gift letter templates

Hi Rina!

I would not refer you to a right loan provider. But you can find this online. There are too many resources where you can get them. Before making any decision you have to find their history and what they are going to be in future.