May 15, 2017
Buying a home at a young age can be difficult. With the rising value of property in Australia, young people are now struggling to buy. As a result, many turn to their parents for help with purchasing their first property and it is only natural for a parent to want to assist their child in the development of their future.
If you're unsure on how you can achieve this, we're here today to discuss some of your options as a parent. All of which will be important, whether you have adult children moving out or young children and are worrying about their future.
1. Contribute your own cash.
You can contribute your own cash towards your child's home loan in part or full. There are ways you can do this. You can become a co-borrower and jointly take out the home loan. You can also lend them the mortgage deposit or buy the property out right for them. We do suggest you speak to professionals before initiating such a big financial commitment as they can help determine whether this is the right step for your family.
2. Become a Guarantor.
A guarantor is a related third party that provides additional security to help purchase property for a family member They are different to a co-applicant because they are not included in the loan, but rather linked to the loan by a guarantee. This is achieved by the guarantor allowing equity into their own property to be used as additional security. We have previously written a blogs explaining the concept of guarantors. If you click on the link, you can find out more about what the role entails - https://www.mortgagechoice.com.au/tim.roberts/blog/guarantors-made-simple--67084
Being a guarantor is a good way to eliminate mortgage lenders insurance and increases their borrowing capacity.
3. Encourage sensible saving habits.
One of the most important and beneficial thing you can do as a parent is encourage your children to make smart choices with their money. This starts in early childhood and enforcing these habits why putting money away each week. This encourages them to save and also helps them contemplate their financial future. This equips your children with the skills to save up for a deposit and buy a home on their own.
You can call and speak to one of our brokers who can provide advice regarding this at NO COST TO YOU. Contact Mortgage Choice Northern Rivers today on 66847096