What ‘the bank of mum and dad’ should know before helping their kids buy a home
The “bank of mum and dad” is the fifth biggest lender in Australia right now, with an estimated $80 billion of debt.
But The Finance Guru Scott Haywood said a lot of parents didn’t fully understand what they were getting into when they tried to help a child buy their first home.
It comes on the back of news demand for guarantor home loans is on the rise as property prices boom in a post-COVID world.
“I think it’s something a lot of people don’t realise,” Haywood told Tom Elliott.
“If something goes wrong, the debt has to be paid by somebody.”
He recalled an example of a man who’d received financial help from his parents to buy property, only to have his business fail and his parents forced to sell the family home.
Click PLAY below to hear him explain on 3AW
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