If you’ve been thinking about helping your child buy their first home, you’re not alone. This might be by helping them with some money for their deposit or ongoing repayments or by acting as a guarantor.
Gift A Deposit: Parents can provide a financial gift to help cover the deposit, making it easier for their child to purchase a property. Guarantor Home Loan: A guarantor, usually a close family member, provides additional security for a home loan using their property as a guarantee. They don’t need to contribute cash or make repayments on the loan. Risks for Guarantors: Guarantors are responsible if repayments aren’t made, which could mean covering the loan or even selling their own property. The guarantee can also limit their options if they want to sell or refinance.