If you’re thinking of helping your kids get onto the property ladder, this article will give you some handy information about your choices.
If you are thinking of helping your kids get on the property ladder, you likely feel like you don’t know where to start. Are there easy ways to go about helping them? What is the most effective way to help them get a house? Do you want your money back, or is this process part of their inheritance?
Whilst we can’t answer every question, we do have some suggestions for you to think about before you begin this process. With such a difficult process, the more you know, the more informed your eventual decision will be.
Being A Guarantor
Sometimes all you have to do is sign a piece of paper to help your child get a property. If you are in a good position financially, acting as a guarantor for a mortgage could be a great way to help your child. It basically means that if they are unable to pay their mortgage, you agree to pay it.
Downsizing Your Own Property
You could downsize your own property, put your things into cheap self storage and then give the freed equity to your child to purchase a property. This option could work if you were considering downsizing anyway.
Giving Inheritance Early
You may wish to give your child their inheritance early. For many people, a good way to go about this is to merge the money their child has saved, with their own money. Then the property is purchased where both you and your children are able to live. This would usually be done with an agreement of care for you as you age.
There are companies that enable you to release equity from your property. This is a complex process and is not something to enter into lightly. However, it can release the case you need to help your child get onto the property ladder.
Allowing Your Child To Live With You Whilst They Save
You could allow your child to move back home with you so that they can save up for their deposit. You could move some of your things into self storage in London (or local to you), or move their things into a unit so they don’t need to move much in. This is an option that requires a lot of discussions beforehand to ensure that it doesn’t get too stressful. Often agreeing on how long this situation will be in place helps everybody feel more in control overall.
Hopefully, our suggestions above have given you some food for thought when it comes to helping your children get onto the property ladder. Remember, the more you know, the better, especially when making such huge decisions. In all cases, it makes sense to consult an expert for advice before committing to any legal or financial decisions.