Helping Kids into First Homes

Hi and welcome to the very first ‘It’s Time’ article, with what I hope will offer you an insight and additional information to help you better understand what’s happening out there in the mortgage market.

'It’s Time’ will be based on topical and timely issues that affect us all during these tight economic times.

This time we focus on scary statistics that I read recently regarding the number of kids who are either not leaving the nest until much later or, after leaving, are returning home to the ‘nest’ usually due, to financial problems they are experiencing out there in the real world. As a parent with an older child still residing at home, I feel pretty well qualified to comment on this increasing phenomenon!

Breaking into the property market these days seems to be getting harder and harder for our kids. Especially when they are trying to purchase their first home. So much so that nearly 23% of young people aged between 20 and 34, still live at home! And this figure continues to rise!

That’s just for openers with those ‘scary’ stats I was talking about!

Did you know that the since the 80s, the average age for getting married for the first time has risen from 22 for women and 24 for men in 1982 to 28 and 30 respectively? Or that the average age for the birth of a child is up from 25 in 1982 to now be 31? And today’s average age for a first homebuyer has increased from 27 in 1982 to now be in the early 30s?

Then to really put this in perspective - of those young Australians between 25 and 29, 54% have moved out and returned home again – two-thirds are returning because of financial problems. Scary stats indeed!

SO WHAT’S HAPPENING IN YOUR HOUSEHOLD?

As parents we all want to help our children achieve the great Australian dream of home ownership and so are prepared to lend a hand with some form of financial support in an effort to help them fly the nest and get into the property market.

The issue is that most Mums and Dads either aren’t aware of the options open to help our kids into their first home or haven’t considered the hidden costs associated with some of these options nor the potential unintended consequences helping the kids out could have on our future lifestyle.

THAT’S WHERE WE CAN HELP

As mortgage brokers, we have a wealth of experience not just in helping people into residential properties but also in advising on the best way to qualify for a loan or helping to develop a cash flow strategy to manage and maintain their loan when they finally do get into their own home.

It’s ironic isn’t it? As parents we can probably afford a home loan if we want one but we no longer need it. Whilst our kids can’t establish the savings history to qualify for a loan but really do need it!

There is a growing list of options out there, available to help with just these scenarios. We understand them and, in consultation with you, can work out the option that best suits your family circumstances.

Some of these options include:

  • Co-ownership with your kids
  • Parental guarantees to support the loan application
  • Gifting a deposit
  • Rent-back options
  • Government grants and incentives

If you find yourself in this boat, why not call one of our team members and arrange a time to meet and talk to you further about some of the options open to you.

You never know, you might just be able to give your kids the break they need to get into their own home sooner and, give yourselves a break by getting that empty nest back again!

I look forward to talking with you again soon. If there are any other finance matters you’d like to discuss, remember we are just a freecall away – you’ll find details on how to contact us on this homepage.

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