It’s not unusual to show your love for a family member by putting your money where your mouth is, so to speak! In Australia, where buying a home is traditionally seen as a rite of passage to adulthood (although this is changing), families are keen to see their younger members purchase their first property.
However, as it has become increasingly difficult to get onto that elusive first rung on the property ladder, many parents are helping their children not by providing money for a deposit, but by going guarantor for the loan and providing their own property as security for the child’s debt.
As generous and practical a gesture this may be, acting as a guarantor is a very serious matter and can land families in financial – and emotional – turmoil with long term consequences. So if you are considering acting as a guarantor for your child’s property purchase, consider also getting some good advice first as to the pitfalls and protections available.
Talk to our property team about your particular circumstances and get the help you need today.