Guarantors Support

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Description

Guarantor Support is available to assist customers obtain a home loan when they are unable to provide adequate security in cases where the loan amount exceeds normal lending margins; and/or if they are unable to provide adequate servicing (for non-personal borrowers only).

Borrowers may consider adding co-borrowers to their loan application if they do not wish to obtain support from a guarantor

Options

The following options are available. Refer to Guarantor Support Policy for details.

Borrower Type	Type of Support available
Personal*	Guarantors for security support
Non Personal**	Guarantors for security and servicing support

 

*A personal borrower must be able to service the loan amount based on his / her income and total repayment commitments. Under no circumstances can a guarantee be taken where the borrower is unable to demonstrate servicing in his / her own right.

**Where the application includes at least one borrower that is a company or a company acting as a trustee.

 

Benefits

Guarantor Support enables customers (in particular first home buyers) to:

• Borrow more funds than they may have been eligible for without a guarantee
• Purchase the property they want rather than having to settle for a cheaper alternative.
• Enjoy a sense of independence and financial security having purchased their own property.

 

Eliminate the need to pay for Lender’s Mortgage Insurance (LMI) or Low Deposit Premium (LDP) where the guarantee reduces the customer’s Loan Valuation Ratio (LVR) to a level where LMI is not required. 

 

Eligibility

Note: Property Share customers do not fall under the below guidelines.

A guarantor must meet the same criteria as an eligible borrower and be related to the borrower in one of the following ways:

• Immediate family members, which are restricted to:
  •  Parents / In Laws
  • Spouse / De-facto spouse
  • Children
  • Siblings
  • Legally appointed guardian
• Company and Trust entities where the relationship between the shareholder/director/trustee and the borrower is in line with the above.
• Trust and its trustees
• Company and its directors

 

Excluded guarantors

The following types of guarantors will not be considered:

• Individuals receiving Government pension and providing a residential property (principle place of residence) as supplementary security
• Individuals who are not related to the borrower as described in the above Eligible guarantors or Exceptions below.  
  Examples of an excluded guarantor, based on their relationship to the borrower, include:
  • Cousin
  • Friend
  • Boyfriend / Girlfriend
  • Neighbour

 

Exceptions

All applications with the below types of guarantors will be considered on a case-by-case basis:

• Individuals who are related to the borrower in the following ways:
  • Grandparent
  • Grandchild
  • Former spouse (court order)
  • Aunt / Uncle
  • Nephew / Niece
• Company and Trust entities where the relationship between the shareholder/director/trustee and the borrower is in line with the above.
• Individuals who are self-funded retirees
• Individuals who are self-funded retirees and the security used to support the guarantee is jointly owned with an eligible borrower

 

Guarantor Checklist

All guarantors must be interviewed separately from the borrowers, in person (face to face not via the telephone) and you must consider the following aspects as part of the interviewing process and to determine if independent legal advice is required:

(a) Do the borrower/ guarantor understand and are they literate in English?

(b) Can the guarantor understand their role as guarantor? Have they

• previously acted a guarantor
• has the guarantor previously had a mortgage?
• does the guarantor appear to be under duress? 
• Have you perceived anything to suggest:
  • the guarantor is acting under pressure and is uncomfortable with the proposal?
  • that by acting as a guarantor they may be placed under financial strain?
• Have you advised the guarantor that:
  • they are guaranteeing the total loan amount
  • they can limit their support by applying for a separate loan
  • in the cases of servicing support and security and servicing support they will be required to make regular loan repayments. 

Note: Servicing support guarantors and joint servicing and security support guarantors are only accepted for non-personal borrowers (i.e. where at least one borrower is a company or a company acting as trustee for a trust)

 

Loan options

Customers can choose any Home Loan, Investment Home Loan or Line of Credit product under a guarantor support arrangement.

Note: Guarantors support is not available for off the plan purchases or loans where foreign income is used for servicing.  

 

Lenders Mortgage Insurance (LMI)

LMI is available for security support only where borrowers / guarantors are in one of the following types of relationship:

• Marital
• Defacto; or
• company and it's directors

 

Loan Documentation

Whilst the loan is marked as "Guarantor Support" or "Guarantor Support Home Loan" , the Bank's offer documents will show the name of the loan as the name of the product selected (e.g. 1 year Guaranteed Rate Home Loan, Standard Variable Rate Investment Home Loan).

 

Interest Rates

Standard Home Loan, Investment Home Loan, Line of Credit interest rates apply.

 

Fees

Standard Fees and Charges apply to Guarantor Support Loans.

 

Please note that there is no delegation to waive establishment fees for loans under Guarantor Support arrangements involving guarantors, except for MAV customers.

Guarantor Support Policy

Guarantor Information Sheet