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Helping your child onto the property ladder- Good idea or not.
Comments
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Our initial plan is to help child to buy a house. Childs been saving for a deposit for two years. Big house for the future (We ask ourself is it worth working his way up the ladder with the prospect of new Mortgage expenses every time he takes a step up the ladder- or get a family home now for the price of a small 2 bed although Council tax, water rates will be more) Or to get a 35 Year fixed mortgage for five or ten years, about £380-400 a month then sell if it goes wrong and hope not to make a loss.
Local 2 bed terraced houses which require modernisation are £85,0000-£100,000 and there are hundreds of them locally, but very few sell for the asking price and others are just left on the market for what seems like years, which is why we shy away from starting in a small house and working up the ladder.
Current housing situation locally is families don’t want 1 or 2 bed houses and are already struggling to sell their current 2 bed properties to step up the ladder. also youngsters can’t afford 1 or 2 beds and if they bought one they are stuck with it). However, locally semi-detached and detached seem to sell much faster, due to them being family homes, which is why we are considering this style of property. The cheapest rentable one bed house is £400 a month in any area, desirable or not, and the cheapest flat is £320. Renting doesn’t seem to make any sense, or am I old fashioned, as child couldn't save for a mortgage. seems like dead money as the property would never be his. However, I’m no expert and I am really open to any suggestions.
We owe less than 10,000 mortgage which might be a problem for a re-mortgage- I don’t know. We are thinking of selling our Semi-detached for a smaller one in about five years’ time when our youngest child has been through our local 6th Form Grammar and University if that’s the route she wants to take. Grammar is on the doorstep and the reason why we are holding back from selling right now, travel expenses, useless bus routes in rural areas. So the detached that we are considering for our son, on a £400 a month fixed 5 year mortgage, would be the perfect home for us in the future, desirable country setting- beautiful house with a garden, garage and drive ( Detached so more Water Rates and Council Tax which child will get 25% single occupier rebate and we would help him in this area too, however gas, electricity, food, etc. will have to played by our child.
Thank you.This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
Yes, our family has been poisoned too by family inheritance. Mother-in-Law has left her house to her oldest son as he rents a property and doesn't have his own home like my husband and I, through blood, sweat and tears. He is Fifty-two years old, never married, moves in and out of relationships, no kids nor ever had a mortgage just a life of luxury. Brilliant guy and has helped us in the past and would help a total stranger if needed. He has Pi**ed his money away in the pub yet he gets handed a property...
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There is another way of looking at the above scenario _
- he's never married and that means that it would be a LOT more difficult for him to buy his own home than for someone who had a spouse/live-in partner. Only one income to provide the deposit/make the mortgage payments/do the necessary work on the house/pay the bills. Single people need a lot more help or a LOT better income than married people in order to have the same standard of housing.
- "has helped us in the past"
- "would help a total stranger"
- don't know why "no kids" would be deemed relevant? No-one should receive less because someone else made a different life decision (ie having kids). Otherwise the childless one has been penalised in receiving less help.
Though - if I were MIL I would still have left things 50/50. No more to someone because they'd taken the personal choice to have children. No less to the person that hadn't been lucky enough to meet the Right One for them.0 -
Keep_pedalling wrote: »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.
This isn't treating them equally. The child who went to university is supposed to earn more than the one who didn't so could afford to pay off the loans. If they don't earn more then they didn't go to the right university so the one who didn't go to university is being penalised by doing the sensible thing and not getting into debt for no extra benefit. You owe the one who didn't go to university their reward for not going.0 -
I wouldn't assist either of my children buy a property, although I'd help them if they were in real financial difficulty.
It's a personal choice, but I believe children strive harder when they know their goal must be achieved solely by their own efforts.
The difference is, prices are crazy bonkers today.
A huge amount of home-owners bought their houses for £50,000-£100,000. Yes salaries were lower then, but if salaries they haven't risen at the same rate as houses have.
Kids these days will find it much more difficult because our country are selling houses at high prices. those "baby boomers" have ruined it for their own kids, and their kids. On the whole they are greedy.0 -
anotheruser wrote: »The difference is, prices are crazy bonkers today.
A huge amount of home-owners bought their houses for £50,000-£100,000. Yes salaries were lower then, but if salaries they haven't risen at the same rate as houses have.
Kids these days will find it much more difficult because our country are selling houses at high prices. those "baby boomers" have ruined it for their own kids, and their kids. On the whole they are greedy.
You are trotting out the usual baby-boomer-bashing bollox.
I don't think I could have made things 'fairer' for my children, or anyone else's, by selling my last house for less than the market said it was worth.
All I did was buy one, live in it for 30 years, go to work and pay my taxes, but somehow in the twisted minds of people like you I was 'greedy.' :rotfl:
I accept it's harder for young people today to buy their own place and nowhere did I say it isn't. However, somehow, my first child did it at the same age as I did.
My younger child is currently renting a nice 3 bed in an expensive area, which is a good deal better than the grotty flat I had at her age. I think she has unnecessarily high expectations, but it's none of my business, is it?
It strikes me that you are attacking the wrong person here. Don't all those people who hand their children gifts to assist with their deposit, simply push the prices up even further?
Go on, argue your way out of that!0 -
I also tend to agree with the poster that doesnt think the child that didnt go to university should get more.
Parents can always see a way to choose bias if they wish to do so and I could even say why one of them might wish to favour my sibling ("Oh well - he's less intelligent and capable than you are"). Errr yes - that is true. But he's married and I'm not. So - right now his house is worth at least twice what mine is.
Or "He's had children and you haven't". Err yes - but that was his personal choice and I've made other equally valid personal choices (in my case - following my conscience far more often than was good for my money-earning abilities - according to employers that didn't like that fact:mad:). He's never lost income by following his conscience.
All round - a "reason" can always be found to favour one over the other and therefore the only fair way is to just make it absolutely equal help to however many children one has.
I'm a great admirer of my best friend - for being absolutely scrupulously to the £ (or non-monetary help given) treating her children absolutely exactly identically.0 -
This isn't treating them equally. The child who went to university is supposed to earn more than the one who didn't so could afford to pay off the loans. If they don't earn more then they didn't go to the right university so the one who didn't go to university is being penalised by doing the sensible thing and not getting into debt for no extra benefit. You owe the one who didn't go to university their reward for not going.
They both went to uni, but our son went to one in our home town, lived at home and very had very low tuition fees. Our daughter went to uni in Leicester and as well as accommodation costs also had to pay significant tuition fees. As one left uni with no depts and the other with significant debts, we thought it fair to even things up a bit.
Since then they have both married and sit in very similar financial positions, and have received equal support with help with house deposits and other gifts aimed at both helping them out and reducing IHT when we finally snuff it.0 -
Look at offset mortgages with YBS
Friends and family!!!
Your oldest gets a mortgage with YBS He has deposit saved ??
You pump every penny you have into the Offset account in your name!! Offset Account also good place to put Retirement Lump sum or other monies.
He/she saves money each month on mortgage Interest and you are buidling up savings.
In 5/6/8 years time you can do the same for second child.
There are lenders who also do mortgages based on parents equilty in there property
https://www.uswitch.com/mortgages/guides/guarantor-and-family-help-mortgages/
https://familybuildingsociety.co.uk/Mortgages/FamilyMortgage/About-the-family-mortgage.aspx?gclid=CLq74Pmt29ACFee37Qodlh8EpA0 -
This isn't treating them equally. The child who went to university is supposed to earn more than the one who didn't so could afford to pay off the loans. If they don't earn more then they didn't go to the right university so the one who didn't go to university is being penalised by doing the sensible thing and not getting into debt for no extra benefit. You owe the one who didn't go to university their reward for not going.
I think you misread that. I read that the older one did go to uni but missed out on the era of tuition fees and huge loans. EDIT: just noticed OP replied and that is the case.
FWIW, as an aside, seems to me the statistics on people who went to university earning more are fatally flawed since they date from an era of less than 10% going to uni , not todays environment of 40% plus (and arguably that 10% was who you'd expect to earn more anyway so they the stats were flawed to begin with)0 -
AnotherJoe wrote: »FWIW, as an aside, seems to me the statistics on people who went to university earning more are fatally flawed since they date from an era of less than 10% going to uni
They were flawed as an assumption, even during that era.
When I stayed at school afer age 16, people assured me that I would soon 'catch-up' wage-wise with my peers, who'd left and gone into careers in banks, insurance companies and other white collar employment.
At the age of 20, or thereabouts, some of those friends had already married and begun purchasing their first home. I was acutely aware of this, as I'd just entered student 'digs.'
After 4 years at uni, I was qualified, but broke. Far from taking-up my profession, I began manual work in a factory, because it paid more and I had debts to clear. By then the 'catching-up' advice was looking hollow, especially as some former friends were already moving to their second house.
The advantage my education and training gave me was stable, enjoyable employment, virtually anywhere in the country. As passport to riches, it was a complete non-starter.
I think there were many more like me, and with current tuition fees and other debts being loaded onto today's students, there will probably be plenty more in the future. A uni education doesn't automatically guarantee a high salary.0
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