Bank of mum and dad
| # | Post |
|---|---|
| 1 | what's the best/safest way to go about helping your child into a home jen51 - 2021-03-28 03:28:00 |
| 2 | Ask your lawyer before you do anything would be my best advice. lovelurking - 2021-03-28 07:03:00 |
| 3 | Yes talk to the lawyer, they will have some good ideas, we have done this for our children through a trust a few years ago, there are other ways as well, pros, and cons, there are simple ways that have less protection, explore these and have a few ideas to bring up with the lawyer, they will give to other scenarios, they sometime need pushing for ideas too so everything on the table K. Good luck. msigg - 2021-03-28 10:46:00 |
| 4 | Sometimes I think a lump sum, a non refundable amount to add to the deposit, making sure you are able to offer the same to all your children is better.. If you are wanting to offer anything larger then you should have say in what type of home they are buying. I see young ones buying needlessly large home when smaller ones would do. And be more affordable. After a while they can trade up, if they move or need extra rooms. It should also give you the right to examine their income & expenditure ie their budgeting regime ...some still think they can buy a house without really knuckling down and saving/budgeting. Rather than getting entangled in something long term like this, as you as a couple have needs, wants, expectations for your income/savings that should not be ignored, I would offer to meet their current Kiwisaver costs. So you put in a weekly or fortnightly amount equal to what they are contributing to KS. If they are sensible they will continue to pay in their work related KS and, if they can, then they may be able to add your contributions to either the KS or to the place where they are saving the deposit. You can do other things such as offering to pay for the solicitors fees or the building report or valuer's fees. This would be done on a non refundable basis and be the same for each child. You might also encourage them to put a small amount in Sharesies or you could on their behalf so they know about the sharemarket. This will stand them in good stead for the future when the expectation of a large capital gain on selling dims. I would offer a potpouri of money to meet specific costs that would be non-refundable. Edited by shanreagh at 11:18 am, Sun 28 Mar shanreagh - 2021-03-28 11:17:00 |
| 5 | Similar to msigg, do your own research before talking to professionals. There are lots of options and lawyers / accountants don't necessarily have a handle on them all. For example one option is to use your own equity and buy a place to rent to family. Charge around market rent and if some of it finds its way into a Kiwisaver account that's not a bad idea. Some complexities but not insurmountable. Suggest make a list of what you think are options, add in some locations, facilities, pricing numbers. Take your list and read, talk, ask questions, expand your list. There are some NZ Facebook groups that can be helpful - I would go for private groups as they are likely to be slightly less aggressive to questioners. artemis - 2021-03-28 11:21:00 |
| 6 | artemis wrote: have you considered the age of the mum and dad and the law of deprevation and that its never a loan but always a gift and lost when the disposable relationship falls apart. So yeah that's a no to the bank of mum and dad unless they have millions in cash assets. Edited by gabbysnana at 1:10 pm, Sun 28 Mar gabbysnana - 2021-03-28 13:08:00 |
| 7 | My mother has a bunch of cash at the moment and I have an offset mortgage with Kiwibank and I have it linked to her account. She has as much money in her account as my whole mortgage. Basically means I pay no interest to the bank and pay the interest to my mother instead. We split the difference between the bank rate I would get and the term deposit rate she would get so we both win. Also for her the money is on call 24/7 so it's not locked in like it would be in an investment or term deposit. It's a no risk way of her helping me and a genuine win-win situation. If she takes her money out we just start paying the bank instead of her. esprit - 2021-03-28 13:18:00 |
| 8 | Yes I think the needs, wants etc of Mum and Dad should come first. Gifts to children for instance are counted into the parents assets if they require a rest home subsidy. They are the ones getting older, possibly facing health issues etc and they are the ones where the chance of a job to crank out money in the future to replenish their $$$$ is diminishing. I sometimes think that Ms & Ds feel a bit 'put on' or expected to do this. Hopefully the children did not ask the parents or have offered to pay market rates if they have. shanreagh - 2021-03-28 13:24:00 |
| 9 | This message was deleted. kittycatkin - 2021-03-28 13:39:00 |
| 10 | I have never been a Bank to my Boys......they have earnt their own money and got their own Houses, i just taught them that , working and earning your own money from an early age , save some, spend some, only buy what you need, not what you Want........ shortee2 - 2021-03-28 15:10:00 |
| 11 | A drawback with helping your child is who they bring into a relationship a possible gold digger toyboy3 - 2021-03-28 15:31:00 |
| 12 | shortee2 wrote:
We just buy a house that suits their needs and rent it to them to cover the mortgage, while they have 3 years to save the deposit. If they have had a change of mind, we would have made $100k plus. smallwoods - 2021-03-28 15:59:00 |
| 13 | Are there implications regarding gifting which can be an issue if the parents are older and will need to go into a rest home soon, or now? tygertung - 2021-03-29 06:21:00 |
| 14 | Once a subsidy is applied for they may look into the finances and can go back many years. I know someone who had to repay what his Mum had given him before she went into care, luckily he hadn't spent it. There used to be a limit on what could be gifted each year but I don't know what it is these days. kacy5 - 2021-03-29 12:33:00 |
| 15 | esprit wrote: orie - 2021-03-29 13:00:00 |
| 16 | jen51 wrote:
What ever you do make sure you do it in a business like manner / documented etc... also take in to account what you want to happen if the "unthinkable" happens.. a relationship breakup of the kids, but also your own.. somebody goes bankrupted or you really hit on hard times Many years ago when I called upon the "bank of dad" to get me out of a small "financial pickle" he wrote it up as a loan, payable on demand... then after about a year he wrote me a note basically saying" you know that $20,000 I loaned you, we'll just call it $15,000 now... basically gifting $5,000, a few years later "lets' call the $15,000 just $10,000" then finally "I forgive the remainder... merry xmas!!".. onl_148 - 2021-03-29 13:27:00 |
| 17 | onl_148 wrote:
Aaaaaaw... lovely to hear something so nice! Esp with all the doom and gloom that is currently floating about (Covid, new rent rules etc etc) biscuitd - 2021-03-29 15:59:00 |
| 18 | Cross collateralize with your home for a loan to the value of the deposit which will be on an interest and principal loan for a very short time. The balance of the loan is an interest only loan. Have monthly statements of both loans sent to your address. Caveat on the property. Guarantee for the value of the small loan only. Monitor the property value and remove your guarantee ASAP (it stays for two years after removal). trike.tours - 2021-03-31 17:12:00 |
| 19 | I lent one of mine the difference she needed to have 20% deposit, interest free, as are all their loans, and if I dont get it back eventually the bank runs out which would be used to help any of the others, the other 3 bought houses with partners so havent needed my help - yet. articferrit - 2021-04-01 14:08:00 |
| 20 | Whatever you do, do it with the knowledge that for whatever reason, you might not get it back and accept that fact without regret, remorse, anger or shame. Also ensure that you have to ability to make the compromises necessary in your own life due to unforeseen events without the need to 'demand' or 'expect' or 'require' it back. ie there is actually no 'safe' way and what is 'best' for somebody else may not be 'best' for you. Edited by brouser3 at 3:21 pm, Thu 1 Apr brouser3 - 2021-04-01 15:20:00 |
| 21 | We acted as guarantor for $30,000 for our son 3 years ago. He was just short of the deposit. Since then he has paid down a lot of the mortgage and our guarantee no longer exists. We did it through our lawyer (he paid all the fees!!). mak47 - 2021-04-01 15:58:00 |
| 22 | my mum did this for me!, i was able to live in her home with her for the price i was paying in rent alone, it wasn't easy, but we did it, we saved our deposit payed our debts. fast_or_last - 2021-04-01 20:47:00 |
| 23 | Talk to a lawyer, guarantee the deposit on the loan, or lend them part of the deposit , but structure it as a loan agreement between your child and partner and you. Get it in writing. Dont give the money as a gift as if the relationship breaks up later the non family partner walks away with half the gift money. Good on you for helping them out. Its getting the deposit together that is the problem and this gives them the start they need. suebid - 2021-04-02 19:59:00 |
| 24 | suebid wrote: none if these are viable for many reasons , now, gabbysnana - 2021-04-04 17:18:00 |
| 25 | Any other comments? gilligee - 2021-04-07 20:20:00 |
| 26 | One idea: Family trust buys the house and rents it back to the kid. As others have said get lawyer advise. yennik - 2021-04-09 09:27:00 |
