Helping your child onto the property ladder- Good idea or not.

dirty_magic

I'd let him save himself for longer until he's almost there and then top up his deposit by giving him some extra cash.

He should be able to afford to save more than £200 a month going forward if he'll be living at home on 17-20k. It feels like more of an achievement if you've saved yourself, and that way he gets to choose where he lives.

Mrs_Optimist

Fairness for both children is the key here.

Mil loaned two separate in-laws the deposits for their purchases, and both paid the deposits back plus interest in full.

She later loaned deposit to another in-law who to date hasn't paid a penny back in 4 years!

She is now stumping up a sizeable deposit for another in-law to buy a first home - no expectation of it being paid back either.

In the meantime my DH, the eldest of the 5 children, has never had a single penny in help.

Believe me, unfairness does breed resentment.

Thankfully we scrimped and ssved, missing out on holidays, nights out etc for a few years to enable us to save our deposit for our first home. Don't owe my Mil thanks for anything, we did it all ourselves.

With our own children, any help we give will be equal, or not at all.

Keep_pedalling

I certainly would not get involved in complex joint mortgages. He probably does need to carry on saving for a year or two before he can get a mortgage, and I agree with others he should be looking at something cheaper, smaller, and not requiring modernisation.

If you still want to help him and don't have spare cash to do so, better to remortgage your own home rather than get involved in a joint mortgage with your son.

moneyistooshorttomention

Mrs_Optimist wrote: »

Fairness for both children is the key here.

Mil loaned two separate in-laws the deposits for their purchases, and both paid the deposits back plus interest in full.

She later loaned deposit to another in-law who to date hasn't paid a penny back in 4 years!

She is now stumping up a sizeable deposit for another in-law to buy a first home - no expectation of it being paid back either.

In the meantime my DH, the eldest of the 5 children, has never had a single penny in help.

Believe me, unfairness does breed resentment.

Thankfully we scrimped and ssved, missing out on holidays, nights out etc for a few years to enable us to save our deposit for our first home. Don't owe my Mil thanks for anything, we did it all ourselves.

With our own children, any help we give will be equal, or not at all.

There's "askers" (ie adult children that ask or at least strongly hint for help) and there's those that just "get on with it - and hope/assume things will be fair if there is any help given - but will try and fend for themselves".

As one with a sibling that is an "asker" - but I myself am a "get on with it" person = I know exactly what you mean.

"Asker" adult children do tend to get given more - and...yep....there will be resentment unless the other child/ren have the temperament of a saint or are supremely unobservant.

Flugelhorn

Are the family offset mortgages any help in this situation?

Mortgage_Moog

Newlook wrote: »

he can’t provide future guaranteed earnings

Who can? I had this discussion when I went for a meeting with a broker and he told me I'd be better off if I was employed to which I replied "I'll go and get a job in Woolworths then".

booksurr

son would struggle to get a mortgage in his own name where someone else (is you) also co-owns the property

you may be party to a mortgage but as co-mortgage the amount borrowed would be subject to his affordability criteria not yours - assuming of course your income is more than his!

the mortgage option is difficult but not impossible

the entire purchase will be subject to the higher rate SDLT if your name is on the deeds. As it will not be your own main home you (not son) will be subject to CGT on your sahe of any increase in value between purchase price and eventual sale price (including if you later on gift son your interest)

the more realistic options are what csgohan4 identifies...

csgohan4 wrote: »

If you want to help your children, don't expect any of the money back, if you do, it will cause problems in the future.

Treat both your children equally and don't get yourself in debt because of them.

any money you give should be an outright, unconditional gift. that means child 2 gets the same (or more if you wish to allow for interveneing inflation) and neither needs pay it back.

You could act as mortgage guarantors if you wish to risk your own financial security, but do not become a direct party to a mortgage or take co-ownership.

Mr.Generous

I made several mistakes with my kids. Firstly a half hearted attempt to get £100 per month board and keep lasted exactly 2 payments each. I should have done this and put the money away for them. £200 would have been more appropriate, I was stumping up £100 a month when I started working in 1985.

Second mistake was offering help with a deposit with the assumption that help did not mean "you can go on loads of nice holidays, buy a car, latest phone and not save up dad will pay deposit"

Eldest came to me one day out of the blue and said er and partner had seen a house they were interested in and would I pay the deposit?

I didn't realise they had been saving up and asked how much they had. Well - nothing.

That was when I started to get real.

How are you going to afford to pay a mortgage, council tax, water rates, electricity, gas, tv license, food bills, if while living rent free at home you cannot save anything from your salary's?

I made the offer conditional - to both kids equally. When you want a deposit I'll contribut a matched £ with what you save to a maximum of £10,000.

A bit of shock and disappointment quickly got over and a savings account opened next weekend. 3 years later eldest and partner had £10k and by the time they found a house it was £12k, the habit stuck.

Youngest did the same and both got £19k gift.

Now my dad did not do things equally. 3 kids, 2 careful and prudent, hard-working and dont ask for help we don't need.

Eldest and only daughter spends more than earnings consistently and will never change. My Dad has twice baled her out by paying off credit cards, paid for other stuff like help moving home and told us it was coming out from her share of inheritance. He has a final will and as I have a copy I can confirm dear sister is getting 50% of money split between the 3 of us with me and brother getting 25% each. Its his money and he can do what he likes, except the unfairness of it has poisoned family relationships.

Treat your kids equally !!

AnotherJoe

Mortgage_Moog wrote: »

Who can? I had this discussion when I went for a meeting with a broker and he told me I'd be better off if I was employed to which I replied "I'll go and get a job in Woolworths then".

How did that work out?

Keep_pedalling

I do treat my children equally, but there could be conditions where I would be more generous to one rather than the other. We paid our daughter's student debt off, but my son who is older and missed out on big uni fees, did not get a matching gift as he did not have that debt.

If I had one child with a serious gambling habit, then he or she would not be getting any generous gifts, while another child still would. If one child was earning a fortune as a merchant banker and the other was a care worker, then I would be far more generous to the care worker in both giving and inheritance.