PARENTS ARE MAKING FINANCIAL SACRIFICES TO HELP THEIR CHILDREN BUY A HOME

A new survey has shown that almost two in three parents are either making or planning to make sacrifices to help their children or grandchildren buy a home.

One in four (who said they were willing to give financial assistance) said they were prepared to retire later than planned to help their children.

The survey revealed 49 per cent of respondents have given cash to their children or grandchildren to help them buy a home, while 16 percent have provided an interest free loan or parental equity guarantee.

Parents are also buying investment properties with the intention to offer these to their children to live in rent free when they are adults, to help them save for a deposit.

Another lending factor in the spot light due to the royal commission is lending over the age of 50.

If you are 50 years or older and will be 70 years or older at the maturity of your loan, most lenders are now required to make sure you can prove an exit strategy.

Acceptable exit strategies include:
1. Superannuation,
2. Selling assets, downsizing,
3. Reducing expenditure.

It is now more important than ever when you are speaking to your bank or broker to look into all factors when applying for a new loan that could affect your approval.

Isaac Baker is a local wealth manager with Yellow Brick Road Torquay with his office at The Dunes Shopping Centre, Level 1, Corner of Merrijig Drive & Fischer Street in Torquay, call or text him to make an appointment on 0400 949 797 or email: [email protected].

Advice in this column should be taken as general in nature and might not apply to your personal circumstances.