Are Your Children Having Trouble Purchasing A First Home?

A 2004 national wide survey confirmed that the big dream for 40%
of Australian parents is to ensure their children are happy and
financially secure The favoured way to do this is to assist
their children with purchasing a home of their own
An increasing number of lenders are offering loan options for
parents to assist their children to buy their first home There
are only two pre-requisites The first is that you will need to
have reasonable equity in your family home to pledge as
collateral security The second is that you may need to have a
moderate income
Once your son or daughter finds a home they would like to
purchase, he or she applies for a home loan and still receives
the First Home Owners Grant of $7,000 to cover purchase costs
As a parent, you can provide a guarantee for either income
support, security support or both income and security support
If your child has “genuine” savings of 5% then the guarantee can
be limited to 20% of the loan amount If the child does not have
their own savings they can ‘tap into” your home equity
After approximately one year or as soon as there is 10% equity
in the home your son or daughter may be able to take over the
loan in his or her own name, releasing you and your home from
the guarantee This is dependent upon their ability to afford
the repayments on their own

Tags | australian, equity, genuine, income, moderate, owners, parents, pledge, repayments, requisites, result, savings, support