Bank First has launched First Start SEA, a program that allows parents to act as guarantors for their children in a mortgage.

The first-ever shared equity agreement (SEA) in the country defines all parties’ legal rights and obligations, provides the security of a registered mortgage, and enables proper disclosure to the home buyer’s bank lender.

 First Start SEA can act as guarantor while also providing solutions to some of the common risks that root in the lack of clarity between a home buyer and contributor.

Bank First CEO William Wolke said that there has been a significant increase in parents providing financial contributions to help their children afford a home, noting that “the Bank of Mum and Dad” is worth more than $20 billion.

He added that the First Start SEA answers the problem of unclear informal loan agreements, which may not address all possible circumstances. This paves the way for the existence of a written loan agreement and registered mortgage that is created specifically for parents and their children.

Additionally, it allows parents to help the home buyer with a deposit and even substantially reduce the amount of their bank loan.

Wolke said that the SEA was created with the protection of both the home buyer and parents or other family members in mind.

“Despite low interest rates, many young people are unable to save for the magical 20% deposit or avoid incurring lenders mortgage insurance costs. And while many parents are keen to help get their children into their own home, there is a risk of legal disputes and family breakdowns when informal family loans and contributions go wrong. The First Start SEA provides parents and children with peace of mind,” he said.


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