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  • Property-a-holics

    Helping children onto the ladder

    Would appreciate your thoughts on the alternative ways of helping our children get their first places over the next few years. They will have good deposits but might not all have well payed traditional employment. I am guessing I can't be a guarantor on their mortgages but is it possible to buy a place with them, where I or my wife might buy a 1% stake , only incur the 2nd home stamp duty rates on our small chunk but still enable them to meet the joint earnings criteria?

    What other methods might work or have you used? If you can't think of any, would you like a lodger!

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    Hi, this probably isn’t the answer you want but you did ask for opinions...

    I’d recommend helping them to understand what it takes, by getting them to do it for themselves. I’m not sure that it helps anyone to misrepresent the market or the work that’s required to become a homeowner. I certainly won’t be helping my offspring financially - I will help them with education (financial and otherwise) but I have no intention of propping them up.
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    Agree 100%!

    I know someone like this and they have no appreciation of what's involved! But then that doesn't apply to all.

    Unfortunately the stamp duty query you mention isn't possible.

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    I just want to help them a bit Adam, not to throw paper planes made of fifties at them as they loll around in pyjamas eating grapes Smile

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    My son is 3. If I help him do his coat up - he keeps asking me to do his coat up for him. I spent some time talking him through how you line up the zipper, and hold the bottom of the coat. Now he can do it for himself.

    I am much more proud of him for this small achievement than I would be if he asked me to do it. And now he is more independent, doesn't take my time up with doing this and his enthusiasm (having been praised for his achievement) for then trying to learn to tie his laces has increased.

    Clearly great parents want to help their kids. I just wonder if too much help, doesn't actually help them?

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    I don't think we are too far apart really. I would never gift a deposit to someone who hadn't bothered to save, or buy a place for someone who refused to work, but I might help a bit if someone had done both of those things and needed a bit of a boost so as not to miss a great opportunity, or was doing important work that didn't pay as well as it should.

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    Speak to a mortgage broker when the time comes. They'll give you the products available on the market to suit your childrens requirements.

    Now you do get products where lenders allow parents income or asset into account without you having to go onto the mortgage. There's a product for all types of people so just save for the deposit and then speak to a broker for best advice. 

    Happy to DM you a name if you need.
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    Saagar

    Disclaimer: I have no legal expertise nor am I a qualified advisor on any subject. A humble landlord using an open forum to exchange ideas and experiences. 


    Thank you Saagar. I will do a little digging over the next few months to get ahead of the game and look into these kinds of products but I won't waste the time of a Mortgage Consultant until things are more imminent.

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    One thing I would suggest to help your children is to get them to put £1 minimum into a Help to Buy ISA before the deadline closes on 30th November 2019.

    https://www.somersetlive.co.uk/news/somer...ut-3293935

    There's also Lifetime ISA's worth setting up before they change criteria or close opportunity.

    https://www.propertytribes.com/lifetime-i...38903.html

    If you have a Lifetime ISA and a Help to Buy ISA, you can only use the government bonus from one of them to buy your first home.

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    Many thanks, they all have LISA's and good saving habits. Some on here seem to think i want to spoil them, but all I want to do is help them a bit! 

    I appreciate your making sure I knew about LISA's, you're right they are a brilliant thing not to be missed.

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    I bet not many on here have heard of the offset plus mortgage offered by Yorkshire Building Society . 3 of my lot have these mortgages and I have 3 savings accounts which are linked to those mortgages . The savings are in my name and I don’t earn any interest on them but they don’t pay any mortgage interest on whatever I have linked to their mortgages .
        Example.  Child  has a 70k mortgage with YBS ( quite normal up north on a back to back terrace)  
                          Parent has 70k savings with YBS linked to the child’s  mortgage 
                          Child paying £500 monthly for mortgage 
                          Every year Interest paid is Zero and Capital repayment is £6k . Obviously the figures would be pro rata for whatever amount is linked as it may not cover the whole mortgage. 
            If your kid goes off the rails and runs off to a hippy commune in California or their dodgy spouse runs off with the neighbour at least you haven’t given a huge deposit and you are still in control of your savings it’s just the lenders who are losing on the arbitrage between the parents lost savings interest vs the child’s saved mortgage interest ( ? 1% vs 3% ) 
          Grandparents can do the same thing and are often in a position to link more savings than the parents .
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