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Broker group endorses family loan product to help FHBs

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Julia Corderoy | 20 Nov 2014, 05:52 AM Agree 0
Broker group Smartline has endorsed a home loan product it says will assist first home buyers get into the market by allowing parents to help their children buy a property without having to become a guarantor
  • Roger | 20 Nov 2014, 09:52 AM Agree 0
    What a great concept. Well done Bluebay. I hope we see more of this innovative thinking to deal with a problem that potentially could see a whole generation locked out of the housing market.
  • Tim H | 20 Nov 2014, 10:41 AM Agree 0
    So assuming the parents don't have the cash they borrow the money themselves and lend it to the children to help buy the home and the children pay it back at an interest rate half of what the parents are paying to their lender.
    Seems the parents are still taking a risk with no guarantee the kids will make loan repayments and if a forced sale on the kids property then Bluebay take their loan, interest legals etc and the parents are left with whatever remains.
    The parents would also have to be in a position to show serviceability on any money they borrow.
    Sounds great for the children and Bluebay but still leaves the parents exposed.
  • Gerry O'Donnell | 20 Nov 2014, 01:15 PM Agree 0
    Tim H, No solution where parents are looking to assist their children is without some risk to the parent. Current practice of parent providing a Gift or Guarantee potentially leave the parent at greater risk than the product in question
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