How to Help your Child buy their First Home?

By: Paul Simpson

17 May, 2018

• Extending financial assistance to your child for the required deposit.
• Being a co-owner of the property that your child is trying to purchase.
• Giving your solid opinion with regards to the property.
Apart from providing your child that much needed support, whether financially or emotionally, here are some guidelines that you can discuss with them, so that they make a wise decision and claim full ownership in the end.

Value of saving

Teach your child the real value of saving, even if your child is already doing great in his or her chosen career path. Why? It is advisable for parents to give tips on how their children can manage their finances wisely. Saving should be their top priority and you can guide them through their savings target by encouraging them to open an account where they could set aside a regular amount for any investment they have in mind like owning a property.

Educate the basic requirements of owning a property

As a parent, you know precisely the ins and outs of owning a property because you have undergone the same experience of how it is to be a first-time home buyer. Educate your child about the basic requirements they have to undergo before owning a property like the initial payments they have to pay, fees (stamp duty) and insurance coverage they need to comply. If you know a reliable property adviser who could assist your child throughout the process, don’t hesitate in contacting them for advice.

Explain the responsibilities of buying a property

Since first-time home buyers think that after paying the required amount needed for the property they want, their responsibilities end there. Explain to them there are still ongoing expenses they have to commit to, especially if they applied for a home loan. Aside from the monthly payments, there are other expenses they have to pay like council rates, maintenance costs and moving expenses if they relocate to another state. As a parent, you have to bring all these accountabilities as early as now, so that you child is financially prepared. Inform them about the risks involved if they fail to pay their monthly repayments to their bank or lending institution.

Suggest a parent-to-child financial assistance using a third party

Lastly, to avoid any family feud from arising in the future due to repayment issues that your child may miss, suggest beforehand this option, the parent-to-child loan assistance hosted by a third party, a bank. The bank will act as the main facilitator of granting the needed loan of your child to purchase a property and administering the collection of loan payments. This option leaves you no involvement, while at the same time ensuring that both parties are protected in the event the borrower misses payments.

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