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Bluebay Home loans has released a Home Loan product specifically aimed at addressing housing affordability and the inability of many first home buyers (FHBs) to save a deposit.
Branded ‘Smart Families’, the product allows parents to help their children come up with a deposit without using their home as security.
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General manager of Bluebay Home Loans Gerry O’Donnell said the product offers brokers another option in helping first home buyers to enter the property market.
“Smart Families is a pioneering product which endeavours to take the stress off Australians who are desperately trying to save for a deposit to own their own home,” he said.
The Smart Families product lets homebuyers borrow up to 20 per cent of the purchase price from their parents.
“Limiting the initial investment amount by the parent, and ensuring the parent’s share of the future growth never exceeds their initial investment percentage, provides comfort for all parties,” Mr O’Donnell said.
The system incorporates a commercial agreement between the parent and child which details how the loan is to be repaid.
“The ongoing interest repayment by the child to the parent is based on the principal sum and tied to the first mortgage interest,” Mr O’Donnell said.
