You can consider your children as independent and as grown-up as you like, but the fact that they have moved away from your home doesn’t mean that they’ve flown the nest. They might’ve started renting their own place in a different state or gone backpacking through Europe, but as soon as something goes awry, they will have nowhere to go back to except for your place. As a matter of fact, until your child finally gets the keys to their very own home, they will not have really flown the nest.
Help from you
Let’s face it, the moment your children are born, everything you do, you start doing for them: every room rearrangement, every dime saved. As a parent, there is no shame in stepping in and helping your child get a good start when it comes to property ownership. Whether we’re talking about loans, credit or mortgage, you can help your kids get a jump-start when it comes to bank ownership, and they won’t complain about it either.
Don’t give the money away
One of the largest parent worries is that their children will become spoiled. If you keep giving them everything for the rest of your life, they won’t know what hit them once you aren’t there for them anymore. Of course, they’re going to inherit your riches, but this won’t teach them how to handle money. Either lend them the money or help them start off with a more reasonable sum. Besides, you should save up some money yourself, for things such as quality aged care.
Buying vs. giving
If you have decided that you want your kids to start off independently, in a house that you helped them obtain, you should consider giving them money to buy a house. Not only does this allow your kids to find what they consider most suitable for their needs, but the whole search process will help them learn a lot about property acquirement and ownership. Always remember that good parenting isn’t serving them money on a silver platter, but rather helping them learn how to use it.
How to raise cash
Let’s face it, despite everything that was mentioned in this entry so far, chances are that you can’t really afford a brand-new home. Secured loans help you use your own home as guarantee to lend money to your children. Of course, shopping around goes without saying, especially when we’re talking about large sums of money necessary for purchasing a home.
Another way to raise cash for helping your children buy a home would be using an equity release scheme called “lifetime mortgage” to borrow money against your own home. Essentially, in this way, you are giving your children their inheritance early; this money will be repaid after your death, by means of selling your home. As a rule of thumb, you can borrow up to 50% of the value of your home (depending on your age and health, of course). In this way you will not have to make any repayments; the interest is added to the lump sum that will be repaid after your death.
Your children can use your help getting their own first home, but simply giving the money away isn’t the best parenting practice. Make sure that they do everything necessary in the process of buying their first home and find the best way to raise cash.