Buying a house is certainly not an easy feat. Even with the financial aspects aside, it can cause a lot of stress for the buyer, as well as being a lengthy process. On top of this, with the current house prices versus standard wage, a reasonably large deposit may be needed to secure a decent properly, especially in London or if you live in the south of England. Some parents may instead try to help their children get onto the property ladder.
Starting a Junior ISA for your child from a young age can help to stockpile £9,000 a year, plus interest, up until they can access the money when they turn 18. Yet, who can open a Junior ISA? As someone with legal parental responsibility for the child, you will be able to open the account on their behalf, and ownership can be transferred when they reach 16 years of age. Your child can also open their own account if one does not already exist when they are 16 or 17. This means that, potentially, you can save money for the first 18 years of their life, which can go towards the deposit for their first home without the money becoming subjected to taxes.
Your Own Savings
Even though you might be putting aside money in a named account for your child, that doesn’t mean that you cannot also use your own savings account to benefit them. If this is something that appeals to you, you might want to consider finding a savings account that pays a high level of interest. As these rates can change, it can be prudent to keep an eye on rising and falling levels of interest, and transferring your savings account accordingly so that you can ensure you always get the best deals and make the most of the money that you have deposited.
Become a Guarantor for a Mortgage
While it can be risky, and you can be left footing the bill should payments fail to be made, some parents might opt to become the guarantor for their child’s mortgage, so that higher amounts or lower deposits can be brought into the equation. There are many factors that you would need to consider before agreeing to this, such as how responsible your adult child is with making any current payments, or if your own financial situation is likely to change within this time period. There is also a possibility that you could lose your own home if you are unable to pay any outstanding money, so this option is certainly not one to take lightly.
Owning a home is something that a lot of people wish to do in life. Considering the expense of doing so, and the potential barriers that might prevent your child from getting on the property ladder sooner rather than later, it can be worthwhile considering if you want to assist with this, as well as how you would go about it.