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Helping your kids to buy property

Getting into the property market as a
first home buyer can be hard. If you’re thinking about going guarantor for your
kids make sure you understand the risks first. [TITLE] Helping your kids buy property Going guarantor for your kids is
one way to help them enter the housing market but it’s also a huge
responsibility. Being a guarantor means you guarantee a loan for someone else. In
other words you are legally responsible for paying the entire debt including all
fees and interest if they can’t pay themselves. Before you agree to this you
need to carefully consider your own financial situation. Could you afford to
make the loan repayments if they can’t? Think about the impact going guarantor
will have on your own credit report. It could also make it harder for you to get
loans in the future. Perhaps you could consider other ways to help your kids like
contributing money to their house deposit so they won’t need a guarantor.
When money and family mix it can cause strain on the relationships even if you
have the best intentions. Make sure you assess both the financial and emotional
risks of going guarantor for your children. Ask lots of questions and
consider getting professional advice before making such a big financial
commitment. For more smart tips visit moneysmart.gov.au

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