We all want the best for our children, and will do everything in our power to see them build a financially stable and secure future for themselves and their children. For many of them, buying a home is the first step to building a safe financial future, but with the soaring cost of houses in and around the major cities this is seemingly unachievable for many young adults. If you are considering helping your kids buy their first home, here are a few things you can do.
Provide advice and support
The first step to helping our children with home ownership is often to offer some seasoned advice. Before you assist financially, you should take time to assess your children’s financial situation, understand what their goals are, and determine what savings they have to achieve this and what they can afford to contribute to home loan repayments. Once this is done you will most likely be able to provide advice on different financial strategies and be in a better position to determine how you can support them. If your home is large enough you can first offer to let your children move back in with you, which will make it easier for them to save money for a house deposit.
Give a cash gift or personal loan
Some parents prefer to help their children once off by giving them a large sum of money as a gift, or to lend them the funds they need for a deposit. It is advised that you clearly stipulate in writing the amount of the loan, how and by when they will repay it and the interest rate on it (if any).
Be a family guarantor
When you can’t afford to give or lend your children a large sum of money, you can act as a guarantor on their behalf. If you have a good financial and credit history, some banks will agree to loan money to your children with you as their guarantor. This does involve some risk taking, as you will be held responsible if, for any reason, your children can no longer afford to make their mortgage repayments.
Buy a second home
If your income is sufficient or your own home has been paid off, you may be in a position where you can buy a second home which your children can buy from you over time. Your children can live in it and contribute to your loan repayments by paying monthly rent and maintaining the house.
Share the house and the responsibility
Another option is to consider house co-ownership and living with your children under one roof. This enables you to share the financial responsibilities of owning a house which includes the cost of insurance, mortgage repayments and house maintenance. Many parents also enjoy this arrangement as it gives them the opportunity to spend more quality time with their children and grandchildren.
One of the most important aspects of helping your kids secure their first home, is ensuring that they buy a home which fits their finances and goals, and which will grow as an investment should they decide to sell it in the future. House and land packages are often the ideal solution for first home buyers as they are newly built, competitively priced and available in a wide range of shapes and sizes to fit any budget.
Complete Homes are experienced new home builders with a large range of display homes available in Perth. Each of their beautifully designed homes comes with a choice of quality finishes such as wall painting, floor coverings, window treatments, fencing and landscaping. Their team of trusted builders is committed to assisting you with all the building services and advice you may require during the process of building a new home. For more information call 131 808 or visit www.completehomes.com.au today.