Three things to watch out for when using the Bank of Mum and Dad – Michmutters
Categories
Business

Three things to watch out for when using the Bank of Mum and Dad

No queues, no paperwork, no PINs to remember, very few customers to deal with — it’s the family-owned bank of your dreams and it has a name: the Bank of Mum and Dad.

It was reported last year that 60 per cent of first-home buyers needed to borrow funds from their parents to get into the property market.

And while doing so is hassle free for many, the seemingly easy-going arrangement can be where the danger lies.

Brisbane lawyer Brian Herd specializes in elder law and often sees clients who have seen the bad side.

“Because the deposits are so high these days and prices are so high, [some clients] can’t afford these deposits by themselves. Nor will the bank lend them the additional deposit,” Mr Herd says.

“So the obvious candidate to do so are their parents.”

Mr Herd spoke to ABC Radio Sydney about the main things parents need to be aware of when lending their children money to access the property market.

.

Leave a Reply

Your email address will not be published. Required fields are marked *