Buying a home is difficult. Buying a home when someone is very young is all-the-more challenging. Young professionals may be able to pay the instalments of the mortgage but saving enough to make the down payment is an uphill task. When one is in their twenties or even early thirties living in the city or when expenses are reasonably higher due to various experiences that the young usually indulge in, it becomes difficult to set aside the money needed to buy a house.

The down payment is the biggest financial challenge. The second challenge is qualifying for the mortgage. There are many lenders with varying rates, the eligibility criteria would be a hurdle and the homebuyer needs to manage their finances well so they can keep making timely payments without impairing their lifestyle. Your credit history will also play a pivotal role in the mortgage preapproval and approval process.

If you are planning to buy a house, you could get your parents or a family member to make some contribution in myriad ways. You may want them to pay a part of the down payment. You may even get them have a cash gift that takes care of the entire down payment. Parents often use the equity of their large home, a second property or an unused block of land to fund the down payment of their grownup child’s home. Families could contribute whatever amount of money they can afford and whatever would be useful for your mortgage.

A guarantor promises to meet obligations specified in the guarantee if the borrower does not. A guarantee may help with a deposit or security requirement, but it does not replace the lender's assessment of the borrower's ability to repay.

A guarantor may have to repay the guaranteed debt and could lose property used as security. The guarantee can also affect their own borrowing capacity. Approval, rates and processing times remain subject to the lender's criteria. Before signing, the guarantor should obtain independent legal and financial advice. See Moneysmart's guarantor guidance.