NSW Property Law - Banks Told Guarantors They Can't Touch Their Money?

[Rae Max]

Hi,

My in-laws went as guarantors for our property about 10 months ago, through one of the big banks. At the time, they were considering selling their property which was held as guarantee. Both parties were told this would not be an issue as their new property would be used as guarantee, and their money would be readily available to them for use.

Once they sold their old property the money they put up as guarantors went against our loan. Now that they have found a new property, the bank has told them they can not have their money back to purchase this property until a new valuation has been done on our property.

This doesn't sound correct. Any help under Property Law?

 

[Rod]

It may be correct. It will depend on the value of the respective properties, size of loans, amount of money and the wording of the guarantee.

Maybe if the original property has gone up enough in value the bank no longer requires a guarantee Of course the reverse may be true and the property has gone down in value. CBD units bought off the plan may not be a good buy.