A combination of low-interest rates and soaring house prices have seen many young Kiwis struggle to get on the property ladder. It’s no surprise that more and more are turning to the bank of mum and dad for help with the deposit.
However, before committing to a financial leg-up, it’s important to know the full picture. Here’s a quick guide on all you need to know about helping family members with a house deposit.
When it comes to the bank of mum and dad, there are three main options:
As with most things in life, there are pluses and minuses involved. And what’s right for your family may not be appropriate for someone else’s.
On the plus side are the following:
However, there are some potential downsides to consider:
If the bank of mum and dad is the right option for your family, then here are some tips to make it a success.
A professional adviser will ensure you have fully considered all the implications, including any legal requirements.
So, before signing on the dotted line, get in touch with our Loan Market advisers for more expert advice.
Carie Townley 027 522 8940
Senior Mortgage Broker, Loan Market Whangarei
Carie Townley is an experienced Loan Market mortgage broker with over 14 years in industry. She works with her clients on debt consolidation and securing them the best loan possible – whether it be for their own home or an investment property, and specialises too in with working with the self-employed and first home buyers. As one of the largest home finance brokerages in Australasia, Loan Market enjoys industry links and contacts that mean they are better placed to negotiate on your behalf with major banks and secure lenders – with access to over 800 home loans from a panel of 30 lenders.
Source: LoanMarket. First published 26 January 2021.