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What about the "bank of son or daughter?"




For some time now much of the news around home buying has been about the first home buyers who just seem to be everywhere we go!


Of course most our first home buyers often have the advantage of KiwiSaver fund withdrawals and the First Home Grants that go with that. In some cases there is the bank of mum and dad as well - to prop up that all important home deposit.


But is there ever a need for the “bank of son or daughter?”


When a lender is considering that all important home loan, the things that are key to success are simply income, and savings or deposit.


Of course, when there is a shortage of either income or deposit, as financial advisers we need to be creative and exhaust every avenue available to us to get that home loan approved.


Every now and again mum and dad do find themselves in a situation where they need to purchase a first home, but are a little short of the mark when it comes to income or savings.


Just occasionally a son or daughter can help out by becoming a joint borrower with parents, which of course can provide that little bit extra.


Whilst the above scenario might seem a little unusual, when all said and done the son or daughter are probably going to inherit some or all of the equity in the parent’s home, so why not help mum and dad start building equity and of course save paying rent now?


It goes without saying that we would advise both mum and dad and son or daughter to take independent legal advice before we put the plan into action.


Sometimes we just have to be creative to make things work – give us a call on (03) 281 8605 or email:


jerome@thompsonmcneill.co.nz


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