As the global economy dictates its mainly negative trends, it has become harder than ever to buy a first property. This is especially true for those young people who can’t save enough money for a sufficient deposit. And if they don’t have the necessary deposit, getting a mortgage deal that they can handle in the long run can become next to impossible. In cases like these, some of them turn to their parents for help. If this is the case with your child and you want to help them, here are some ways you can do it.
Probably the best way for you to help your child buy a property is by giving them some money as a gift. The amount depends on how much you have or can afford to give, but if you can give them enough for a deposit, you will open the door to a wider range of mortgage deals.
About one quarter of the property’s value would be ideal, but even as little as 10% will allow them to get a reasonable loan. In case you can actually afford to buy the whole property for your child, it’s also an option. However, should you decide not to give them the entire amount, they will have to take some financial responsibility, which can prove to be a good thing, since they’ll be more appreciative of their hard-earned home as well as the help you’ve provided them with.
And if you’re not ready to part with your money that easily, you can always lend it to your child and have them give it back to you in a way that suits you all.
If you want to help your child, but you don’t have any savings to dip into, there are still some alternatives you can consider. One of them is downsizing. Once your children leave your home, you might end up with more space than you actually need. A bigger house means bigger utility bills and more time and effort for regular maintenance. Selling your home, buying a smaller one for yourself and giving your child the price difference is a smart solution to both, your child’s problem and your own.
The best time for this course of action is after you retire, since it’s the perfect opportunity to look into living communities where you’ll be comfortable and happy. For example, Mark Moran Vaucluse retirement living is an affordable way to have around the clock care, while living a lifestyle of your choice and making new friends along the way. They even guarantee to buy your suite or apartment back as a way to secure you financially.
Even if you don’t have any money stashed for a rainy day and you aren’t ready to put your own home up for sale quite yet, there’s still a way for you to help your child. The bank will probably be ready to give them a bigger loan if you choose to guarantee it. It’s as simple as the bank putting your income on top of your kid’s and then assessing them together.
Also, you can make a security cash deposit in the bank, as well as give them your permission to place a charge on your property. This would mean that your child, with your help, would be eligible for a loan that would cover a huge part, or even the complete value of the property they’re trying to purchase. As this would require a lot of trust from your side, ask to be presented with every scenario these actions could lead to, just in case things don’t go the way you and your children plan them to.
If you’re willing to help your child, there is always a way to do it. Sit down together, talk things over and find the best possible solution for you and them.