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The pros and cons of Family Guarantee loans

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For many young Australians, home ownership may be harder to attain compared to previous generations. Many Australians are putting off buying their first home until later in life, while the overall home ownership rates across the nation have been dropping since the mid-1990's1. It seems like a grim scenario, but there are still solutions available - and it isn't just a matter of saving more or for longer for a larger deposit.

What is a family guarantee?

With IMB Bank home loans a Family Guarantee could help you enter the market. It can allow your family to help you purchase a property by acting as guarantors, making it possible to get into your home sooner without having to spend further years saving for a deposit. By offering either their own home or a term deposit held by IMB Bank as security, family members can help borrowers avoid lender's mortgage insurance and enable a lower interest rate.

However, just like all lending products, it is best to know the full picture before you commit. Read on to see if a Family Guarantee could be right for you.

  What are some potential advantages?
  What are some potential disadvantages?

In summary

Overall, a Family Guarantee could help make your way into your first or next home. By increasing the value of security provided against the loan, the requirement to save enough money to eliminate the additional cost of Lender’s Mortgage Insurance, a significant difficulty faced by first home buyers today2.

For more information on Family Guarantee options, get in touch with the team here at IMB Bank; and remember, when dealing with loan agreements, seek appropriate legal advice before signing on the dotted line.

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Source:

1 - Australian Institute of Health and Welfare, Australia's welfare 2015

2 - First Home Buyers Australia, 2016 National First Home Buyer Report

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Why choose us?

Established in 1880, IMB Bank is one of the most enduring financial institutions in the country, helping people achieve their financial goals for over 140 years. Our members can access a fully featured range of services: home and personal lending, savings and transaction accounts, term deposits, business banking, and more.

Our renowned personal service is backed by innovation, providing convenient, secure digital banking options where and when you want it. IMB also has a growing retail branch network throughout NSW and Victoria, for when you need to speak to someone in person, and a team of professionals at our locally based contact centre. We have a lending specialist in every branch and a team of mobile lending specialists who will come to you.

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