THE BUYERS GRAILHelping your child buy a home
The four ways a family helps with a purchase, a gift, a loan, a guarantee or buying together, and what each means for the parents, the buyer and the lender.
Two generations, one decision. Parents who put money or a guarantee behind a purchase want to know what they are exposed to and for how long; the adult children they help want to know what the lender will make of it and what it changes about the loan. These pages are for both, and for the conversation between them. They explain what each form of help does. They never say whether a family should help.
The four ways families help
| Form of help | For the parents | For the buyer | For the lender |
|---|---|---|---|
| A gift | Money that is gone. Above Centrelink's free area it can still count as the giver's asset for five years if a pension is in the picture. | A bigger deposit, a lower loan-to-value ratio, often no lenders mortgage insurance. | Wants a signed gift letter, and sometimes some of the deposit to be the buyer's own savings. |
| A family loan | Money expected back, on terms both sides wrote down. Interest, if charged, is income to declare. | A bigger deposit and a second repayment; the lender usually counts it as a debt. | Sees a liability and tests serviceability with it. May still want a gift letter if the loan is to be treated as a gift. |
| A guarantee | No cash moves. Their own property secures a capped part of the loan until the guarantee is released. | A loan above 80% of the price without the insurance premium; the deposit does not change. | Holds two securities; sets the cap; usually requires the guarantor to see a solicitor of their own first. |
| Buying together | A share on the title, with duty, land tax and capital gains consequences of their own, and an exit to plan. | A co-owner and a co-borrower; the first-home concessions may depend on every owner being eligible. | Assesses every owner as a borrower. |
The guides
- Guarantor loans explainedSecurity versus servicing guarantees, the cap, the release, and what happens if repayments stop.
- Gifted deposits and what lenders needGenuine savings, the gift letter, and why a gift and a loan differ on the application.
- Family loans done properlyWritten agreements, interest or none, what the lender sees, and protecting the money if things change.
- Co-buying with parentsOwnership shares, tenants in common, who lives there, the exit plan, and the tax consequences.
- Gifting rules, the age pension and the family homeCentrelink's gifting limits, the deprivation period, using the home's equity, and retirement income.
- Family help and the first-home schemesA gift, a guarantee or a co-owner against the 5% Deposit Scheme, the grant and the duty concessions.
The tool, the checklist and the report
- Family-help plannerOne purchase four ways: the deposit, the LVR, the LMI avoided, the monthly commitments and what the family has at stake.
- Before the family money movesThe questions both sides answer first, and who to see: a solicitor, a broker, an accountant.
- The report for the familyWhat the report gives both generations before the money goes in, and the pack for checking a shortlist.
- Your state's rulesDuty, first-home concessions and grants change at the border; the state pages carry each test.
How to read these pages
Each page describes what a form of help does: to the deposit and the loan, to the parents' assets and income tests, to the tax and legal position of both sides, and to the schemes the buyer may be counting on. Where a rule has a figure, the figure carries its source and the date it was checked. Where lenders differ, the page says "commonly" and means it: the only rule that applies to a particular loan is the one the lender writes into it.
Three professionals appear on every page for a reason. A solicitor draws up a loan agreement or a guarantee and explains what it binds; a broker or lender says what a policy will accept; an accountant or financial adviser looks at the parents' side, from the age pension to the estate. The pages tell you what to ask each of them, not what they will answer.
Where the report fits
A Property Decision Report does this work for one property you're weighing up: the fair-value range built from recorded comparable sales, where the asking price sits against it, the vendor and agent read, the risks that matter, and your opening, target and walk-away numbers, in writing, within 24 hours.
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Every pack is the same full report; only the number of properties changes. $249 for three properties, $349 for five.