Bank of Mum and Dad - Deposit for Kids House

ronhunnisett

:)Hi,

We are both in our 60s and own our house outright. We are both still working and have a joint income of 65k pa.

WE want to help our kids get on the property ladder, they are renting at present and have no way of raising a deposit of 60k or so.

What would be the best way for us to help them with the deposit. I understand equity release is not the first choice, and was thinking of approaching a broker for an interest only loan or mortgage so that we only pay the minimum each month.

When we have both left this mortal coil the lender would take back their dues and the rest would go into our estate.

Any views on what is best or what to avoid.

Thanks

CloudCuckooLand

You need an income, for the life of any mortgage, to support it. Is your pension adequate to support a mortgage?

You should seek proper financial advice to consider the whole picture. Other assets. Dependents. Wills. Benefits, including means-tested ones. Tax. Deprivation of assets rules. Your future plans, if any, to move house. A whole list of other things...

Have a read to narrow down, hopefully, then seek detailed, personal advice;

http://www.ageuk.org.uk/money-matters/income-and-tax/equity-release/
http://www.unbiased.co.uk/find-an-independent-financial-adviser/personal-finance/mortgages/equity-release-unlocking-money-from-your-home/
http://www.ageuk.org.uk/buy/equity-release/

Beware of sharks in the market. Pick an accredited organisation - SHIP or similar.

AndersLimpar_2

Why such a large deposit? They want to buy Trump Tower as there first home?

Assuming they have good credit history, 90%LTV's are available with fixed rates around 5.5%. I wont spell out the figures but you dont need 60k in the bank to buy a home!

getmore4less

Creating debt is usualy not the best option to release equity without the income to support it.

This could be their income as well as yours, problem is getting the loans since the new properties will be limited to 90%(ish) and using yours will be even harder.

Downsizing will do the job if that is an option.

You could sell and rent.