There are numerous milestones in the life of a parent. In the beginning there’s the birth of your child, shortly followed by their first words and first steps. Later on they start school, experience their first relationship and then the emotional days of graduation and starting college.
But one of the most bittersweet parts of parenthood is when your little one finally packs up and moves away from home. Of course, you want your child to become independent and start their own family, but that doesn’t make it any easier to say goodbye.
As a parent, the last thing you want to be is overbearing. This will add a shade of negativity and extra stress to your kid’s move that they don’t need. The best thing you can do is to help them as much as possible throughout the entire process. Initially they will most likely be renting an apartment, but eventually they will want to take their first steps on the property ladder. Use your own personal experience to help them along the way to buying their very first home.
Here are three ways you can set your child up for the best start in life.
Talk them through it
Getting a leg up on the property ladder is harder for young people than ever before. Fortunately, they have you to give them some much needed advice. You’ve been through it all before – the uncertainty, the mortgages, the house viewings. Afford them the benefit of your experience to give them a head start and learn from your own mistakes.
Set them up financially
Some parents might be in the fortunate position to give their children financial support towards buying their first home. Depending on your particular circumstances, there are money ways you might want to do this. You could of course dip into your own savings to give your kids a boost, whether as a gift or as a loan you expect them to repay over time. If you opt for this latter option, you have the benefit of seeing your money returned while ensuring your child is not subject to high interest rates or unclear terms. Alternatively, you could set up a savings account for them when they are younger, into which you regularly pay a small amount. Over time the interest will accrue and they’ll have enough money to put down a deposit.
Be a guarantor on their mortgage
For a first-time buyer, there are many challenges involved in getting a mortgage. Young people are seen as higher risk, and as a result may have to pay a larger deposit or higher interest rates. By putting yourself down as a guarantor on their mortgage application, you are effectively telling the broker that you will be able to cover the mortgage if your child is unable to. Just remember that there is an inherent risk involved in this option, as you may need to put your savings or even your home up as security. See FHA FAQs for more information on mortgages and repayments.
Follow these three tips and your child will have a much easier time buying their own home and starting their new life.