Nowadays more and more children are having to lean on their parents when trying to save for their first home. In today’s housing market, trying to afford a deposit for a mortgage is becoming a financial burden for many, if not all, young people. With the cost of rent skyrocketing and increased competition when trying to secure a home, many people are coming to the realisation that when it comes to moving into their first house, it might not be a reality for many years to come.
Parents, however, can help support their children. While many parents may not be able to give their kids the money, there are many ways in which they can help. If you’re watching your children struggle with saving a deposit and obtaining a mortgage, here’s how the bank of mum and dad can come into play and help them become first-time buyers.
Invite Them to Live with You
For many young adults, the thought of moving home can be somewhat of an embarrassment, with many thinking it’s a step backwards. However, this isn’t the case. If your children are able to move home and stay with you for a year or so, make sure to extend the invitation and explain that it’s not a move backwards, but, in fact, a sidestep into the right direction.
Ask your child to come round for a meal and talk about their current living situation. Your child may be too embarrassed to ask to come home, so if you simply make the suggestion, you could alleviate any anxieties they could be feeling. Before your child comes home though, everyone involved needs to make a plan. For instance, will they be paying rent, and if so, how much? If they have a partner, will they be coming with them? While many parents may find it strange to ask for rent, make sure you ask for a small amount towards their home and board. Even if they pay you £100 a month, this still leaves plenty of money to be placed into their savings account.
Offer Emotional Support
Trying to save for a house can be a tiring and stressful experience, and many people can develop low moods and morale when saving. While your child is cutting down on certain experiences, for instance, limiting how many times they go out for lunch, etc., then offer to take them out every now and then so that they don’t feel like they’re missing out. While many people have to make sacrifices, your child still needs to enjoy life, and as their parents, you can help bridge the gap.
Most parents will have their own homes, and they will know the process their children are going through. Therefore, impart your knowledge and help them understand how the housing market works, how they can invest their money, whether they need a mortgage broker and which is the best credit union mortgage available in the current market.
Lend Them the Money
While this option isn’t available for most, if you can afford to lend your child the money for their deposit, then you should seriously consider doing so. You can give them the full amount, or if your child is missing a couple of thousand, you can help them with the outstanding amount. Again, sit down with your child and come up with a payment plan everyone agrees on before lending them the money. Decide on the monthly payments they are to make back to you, and ensure they stick to the plan.