With property values softening in some markets and affordability improving from recent peaks, more first home buyers are seeing an opportunity to enter the market. But for many, saving a sufficient deposit and meeting lender requirements remain significant hurdles.
For parents and grandparents who want to help, a guarantor loan is often the first option that comes to mind. However, becoming a guarantor is not the right fit for every family.
Some homeowners may not want to secure someone else’s loan against their property or take on the ongoing obligations that can come with a guarantee arrangement. For Australians aged 55 and over, a reverse mortgage can provide an alternative way to access home equity and support the next generation.
This option may suit clients who have significant equity in their home and want to help children or grandchildren with a deposit, purchasing costs or reducing the size of their loan.
Rather than acting as a guarantor, eligible borrowers may be able to access a portion of their property’s value through a Connective Horizon Reverse Mortgage and gift or lend those funds to family members.
With a Connective Horizon Reverse Mortgage, eligible borrowers can unlock equity while continuing to live in and own their home. This can give families more flexibility to help loved ones buy sooner, without becoming directly linked to their mortgage.
This creates a valuable conversation with clients who are asset-rich and keen to support family members on their home ownership journey. If your clients want to help loved ones buy sooner, a reverse mortgage could be a practical solution worth exploring.
If an eligible homeowner is considering using home equity to support a family member, contact your Connective Lending Manager to discuss the client scenario and relevant considerations.
