Parent Bank
This is the most flexible bank you will meet – Parentbank ™
Parental support is common these days with a number of parents wanting to help their kids into their first homes.
There are a few different ways that parents can support you:
- A Gift
This is the simplest. Your parents give you cash that you can use towards your deposit.
A gifting certificate will need to be signed, stating that it is an unconditional gift, and it is not to be repaid.
- A Loan
Your parents can loan money to you to help you with your deposit.
Typically, these are two key criteria for this:
- It is interest free
- It is repayable once the house is sold
It is possible for there to be interest/repayments, but those repayments and interest will need to be factored into the banks servicing calculations – which can tip it over the edge.
The main advantage to doing it this way is that it forms a layer of asset protection.
If you are in a de-facto relationship and your parents loan you the money for the house and say 3 years later the relationship ends and the house is sold, the full amount of the loan is then repaid to your parents. If this were a ‘gift’, it may be that 50% of the gift goes to the partner.