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Mum & Dad have given me a deposit on my house, can I get a loan?

Home ยป FAQs

In some cases, absolutely however it would depend on how much your parents are willing to give and if it is needed to be paid back to them at all. This is known as a gift, and is very common in this day and age when rent and property prices are very high. In some cases it is the only way for a young couple or first home buyer to enter the market. This coupled with the first home buyers grant can go a long way towards your deposit however the lender will carefully consider if you can afford the new loan repayments as well. In addition to the loan application your parents may need to sign a Statutory Declaration or at the very least a letter stating that they have provided a non-refundable gift and we also require evidence of these funds being available. Another common form of a deposit is also using your parent’s home as the additional security required for the deposit. Basically your parents would be guaranteeing the loan by way of their house or one of their investment properties with what is known as a third party guarantee. The banks have recently tightened up on this practice of lending however it is still available in many instances and your parents must also seek legal advice to fully understand exactly what they are signing up for.

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