No Credit Check :: News
SHARE

Share this news item!

Navigating the Waters of Family-Funded Home Purchases

Navigating the Waters of Family-Funded Home Purchases

Navigating the Waters of Family-Funded Home Purchases?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

In their quest for homeownership amidst daunting economic conditions, an increasing number of first home buyers are seeking financial refuge with the 'Bank of Mum and Dad.' Access to these familial funds, often necessary to compile a housing deposit in today's market, introduces complexity into the mortgage-lending landscape.

The assistance from relatives has been substantial; 42% of first home buyers managed to secure support to climb onto the property ladder, according to Helia's research. Contributions from the Bank of Mum and Dad typically serve to pad deposits-with 60% of these gifts directed to that end. Yet such acts of generosity are not free of risk or complications, and it's crucial for involved parties to understand the implications thoroughly.

Lenders have a fiduciary responsibility to dissect an applicant's financial picture, including savings, income, and debts, to confirm their loan servicing capability. A substantial deposit facilitated by a family boost does not exempt buyers from showcasing responsible fiscal habits, though some recent flexibility has been noted, according to Lendi Group's Shaun Lordan. He mentions a trend in which verification of genuine, long-term savings has diminished from a three-month to a one-month requirement among many lending institutions.

For parents to financially buttress their child's deposit, a delineating component is the gift letter-a declaration affirming that the funds provided are a true gift and not a loan. This document's intricacies and demands can vary by lender; while some accept a generic format, possibly counselled by a mortgage broker, others provide their specific templates and may insist on further details about the benefactor.

Unseen yet critical, are the long-termed perils gifting can present within the web of property and familial relationships. Indeed, future separation or divorce introduces complexity in asset division if these monies were offered as a gift. Macpherson Kelley's principal lawyer, Brendan Herbert, emphasizes the need to anticipate these scenarios as honestly giving can inadvertently shade into contentious bickering during property settlements.

To safeguard inter-family transactions against such disputes, alternative arrangements exist. Loans, when officially acknowledged, become liabilities in separation's financial calibration, though this stance can imbue mortgage procurement with new hurdles. Alternatively, a Family Law Act Financial Agreement pragmatically delineates asset division in a separation, considering any family contributions as stipulated.

Herbert advocates for professional legal expertise when crafting these agreements, citing that substandard documentation, absent legal advice, or coercion could render them invalid. He champions such agreements for their cohesive defense against unsanctioned claims on family-forwarded money.

In essence, while helium balloon high home prices impel generational generosity, the financial fabric weaving these purchases can't be naively knotted. By channeling through informed channels like gift letters, family loans, or legal agreements, the passage toward property acquisition becomes less treacherous, guiding first-time buyers to safe harbors in their domestic dreams.

Published:Sunday, 11th Feb 2024
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Finance News

Commonwealth Bank Raises Alarm Over Surging Home Loan Demand
Commonwealth Bank Raises Alarm Over Surging Home Loan Demand
22 Nov 2025: Paige Estritori
The Commonwealth Bank of Australia (CBA), the nation's largest lender, has expressed concerns about the current surge in home loan demand, suggesting it may be contributing to escalating property prices and potential financial instability. CEO Matt Comyn emphasized that while the bank benefits from increased housing credit, a more moderate growth rate would better support long-term financial stability and housing market accessibility. - read more
Westpac's RAMS Financial Group Penalized for Home Loan Misconduct
Westpac's RAMS Financial Group Penalized for Home Loan Misconduct
22 Nov 2025: Paige Estritori
RAMS Financial Group, a subsidiary of Westpac Banking Corporation, has been fined A$20 million by Australia's Federal Court for serious misconduct in its home loan practices between June 2019 and April 2023. The Australian Securities and Investments Commission (ASIC) initiated the lawsuit, citing issues such as the use of falsified payslips to approve loans, engagement with unlicensed mortgage referrers, and inadequate oversight mechanisms. - read more
Australia's Major Banks Reducing Dependence on Mortgage Brokers
Australia's Major Banks Reducing Dependence on Mortgage Brokers
22 Nov 2025: Paige Estritori
Australia's 'Big Four' banks-Commonwealth Bank of Australia (CBA), Westpac, National Australia Bank (NAB), and ANZ-are strategically reducing their reliance on mortgage brokers in response to squeezed profit margins resulting from lower interest rates, rising operational costs, and intense market competition. Currently, mortgage brokers account for approximately 80% of new home loans in Australia, a significant increase from 50% six years ago. However, banks are now focusing on more profitable, in-house mortgage origination channels. - read more
Japanese Banks Drive Growth in Australian Business Lending
Japanese Banks Drive Growth in Australian Business Lending
14 Nov 2025: Paige Estritori
In July 2025, Japanese banking giants Sumitomo Mitsui Banking Corporation (SMBC) and Mitsubishi UFJ Financial Group (MUFG) emerged as significant growth drivers in Australia's business lending sector. SMBC recorded a 4.66% increase in their business loan book, adding A$1.19 billion, while MUFG achieved a 3.63% expansion, contributing an additional A$0.62 billion. - read more
AFIA Unveils New Code to Elevate Non-Bank Lending Standards
AFIA Unveils New Code to Elevate Non-Bank Lending Standards
06 Nov 2025: Paige Estritori
The Australian Finance Industry Association (AFIA) has recently introduced its Finance Industry Code of Practice, marking a significant advancement in the non-bank lending and specialist banking sectors. This pioneering initiative aims to establish a new standard for integrity, transparency, and fairness within the industry. - read more
Australia's Housing Boom: A Golden Opportunity for Mortgage Brokers
Australia's Housing Boom: A Golden Opportunity for Mortgage Brokers
06 Nov 2025: Paige Estritori
Australia is currently experiencing a housing 'super cycle,' characterised by a substantial increase in demand for new homes. This surge is driven by a chronic undersupply of housing, demographic shifts, and evolving lifestyle preferences. For mortgage brokers, this trend presents a unique opportunity to expand their client base and services. Find out now if you qualify and compare rates, offers and options from multiple lenders - without a credit check! - read more
Moneytech and Xero Collaboration Simplifies Financing for Australian SMEs
Moneytech and Xero Collaboration Simplifies Financing for Australian SMEs
06 Nov 2025: Paige Estritori
Australian non-bank lender Moneytech has announced a strategic integration with Xero, the global small business accounting platform. This partnership aims to provide small and medium-sized enterprises (SMEs) with a more efficient and streamlined process for accessing working capital. - read more
RBA Weighs Additional Rate Cuts in Response to Economic Indicators
RBA Weighs Additional Rate Cuts in Response to Economic Indicators
29 Oct 2025: Paige Estritori
The Reserve Bank of Australia (RBA) is currently assessing whether further reductions in interest rates are necessary, following recent economic data indicating increased consumer spending and persistent inflation in certain sectors. This evaluation comes after the RBA's decision to hold the cash rate steady at 3.60% in September, subsequent to three cuts earlier in the year. - read more
Federal Court Halts Cigno Australia's Unlicensed Lending Operations
Federal Court Halts Cigno Australia's Unlicensed Lending Operations
29 Oct 2025: Paige Estritori
The Federal Court of Australia has issued permanent injunctions against Cigno Australia Pty Ltd and BSF Solutions Pty Ltd, preventing them from engaging in unlicensed credit activities and charging prohibited fees. This ruling follows findings that, between July 2022 and October 2023, the companies provided loans totaling $34 million to over 100,000 consumers, while charging fees exceeding $70 million, all without holding an Australian Credit Licence. - read more
Investment Boom in Battery Storage as Australia Accelerates Renewable Energy Goals
Investment Boom in Battery Storage as Australia Accelerates Renewable Energy Goals
29 Oct 2025: Paige Estritori
Australia is experiencing a surge in investments in Battery Energy Storage Systems (BESS) as the nation aggressively pursues its goal of achieving 82% renewable energy by 2030. This transition, driven by rapid expansion of solar and wind infrastructure and the closure of coal plants, has created a growing demand for flexible energy storage solutions. - read more


Finance Articles

Understanding No-Credit-Check Loans: A Lifeline for Managing Financial Stress Wisely
Understanding No-Credit-Check Loans: A Lifeline for Managing Financial Stress Wisely
Financial stress can feel like an unstoppable force, a cycle of worry that impacts not only our peace of mind but also our fiscal health. It represents the anxiety and pressure associated with the inability to meet financial obligations, be it due to unforeseen expenses, unemployment, or a plethora of other reasons. - read more
Steps to Take Immediately During a Financial Crisis: A Credit-Friendly Approach
Steps to Take Immediately During a Financial Crisis: A Credit-Friendly Approach
A financial crisis can come in many forms, such as a job loss, unexpected medical bills, or an economic downturn. These events can drastically alter your financial stability and may lead to financial distress. - read more
How to Use Credit Cards Wisely to Enhance Your Credit Score
How to Use Credit Cards Wisely to Enhance Your Credit Score
Your credit score is more than just a number; it's a reflection of your financial health. Essentially, it’s a numerical expression that represents your creditworthiness. Lenders use this score to assess the level of risk involved in lending you money. - read more
Top 5 Mistakes That Damage Your Credit Score and How to Avoid Them
Top 5 Mistakes That Damage Your Credit Score and How to Avoid Them
Maintaining a healthy credit score is crucial for anyone looking to secure their financial future. A good credit score can open doors to better loan rates, more favourable credit card terms, and even housing opportunities. It's something that impacts many major financial decisions you make in life. Without a solid score, you might end up paying more in interest and find it harder to get approval for the things you really need. - read more
Quick and Easy Tips to Boost Your Loan Approval Odds Without Affecting Credit
Quick and Easy Tips to Boost Your Loan Approval Odds Without Affecting Credit
Loan approval can often be a crucial milestone in achieving your financial goals. Whether you're looking to buy a home, pay for education, or consolidate debt, securing a loan can provide the financial boost you need to move forward. - read more
Maximize Your Loan Options without a Credit Footprint: Strategies to Know
Maximize Your Loan Options without a Credit Footprint: Strategies to Know
As we navigate the complexities of today's economy, the significance of credit can scarcely be overstated. Whether we're considering a home mortgage, a new car, or managing our personal finances, our credit health often dictates the terms and accessibility of financial support. A robust credit score can open doors to favorable loan terms and rates, while a poor score can narrow our options and cost us more in the long run. - read more
How Your Credit Score Affects Loan Approval and Interest Rates
How Your Credit Score Affects Loan Approval and Interest Rates
Your credit score is a crucial part of your financial health. Essentially, it’s a numerical representation of your creditworthiness, calculated based on your credit history. In Australia, credit scores range from 0 to 1200, with a higher score indicating better creditworthiness. - read more
What to Do if You've Been Denied a Loan Due to Your Credit Score
What to Do if You've Been Denied a Loan Due to Your Credit Score
Your credit score is a critical number that plays a significant role in your financial life. It represents your creditworthiness, or in simpler terms, how reliable you are in repaying borrowed money. - read more
Understanding Your Credit File: How to Seek Loans without Negative Impacts
Understanding Your Credit File: How to Seek Loans without Negative Impacts
Understanding financial health is paramount when venturing into the realm of loan acquisition. It's the backbone that supports not just your immediate monetary requirements but ensures longevity in your fiscal stability. At the heart of this understanding lies a critical aspect: the credit score. It's a numerical representation of your financial trustworthiness, influenced by past fiscal decisions and behaviors. - read more
Understanding Soft Inquiries: How to Check Loan Options Without Affecting Your Credit Score
Understanding Soft Inquiries: How to Check Loan Options Without Affecting Your Credit Score
Soft inquiries are a type of credit check that does not impact your credit score. These checks occur when you or a company reviews your credit report as part of a background check, pre-approval process, or other non-lending purpose. - read more


Need Help Finding a Loan?
Find out now if you qualify and compare rates, offers and options from multiple lenders - without a credit check!
Loan Amount:
Postcode:

All quotes are provided free and without obligation by a Specialist from our National Broker referral panel. See our Privacy Statement for more details.

All finance quotes are provided free and without obligation. We respect your privacy.

Knowledgebase
Interest Rate Lock:
An agreement between a borrower and a lender that allows the borrower to lock in the interest rate on a mortgage for a specified time period.


Quick Links: | No Credit Check Loans | Personal Loans No Credit Check | Bad Credit Loans | Business Loans No Credit Check | Fast Cash Loans Australia | Unsecured Loans | Guaranteed Approval Loans | Short Term Loans | Emergency Loans | Same Day Loans