As housing affordability continues to create challenges, many younger Australians are looking for ways to enter the property market while managing rent or board payments.
Some first home buyers are turning to parents or family members for financial support, including help with deposits or loan guarantees. You can read more about this trend in the realestate.com.au article.
While helping a family member purchase a home can be rewarding, these arrangements may create unexpected legal and financial risks.
Parents or relatives who provide financial assistance should consider how this decision may affect their estate planning. They should also ensure their wishes remain clear if circumstances change in the future.
Family members who act as loan guarantors should understand their responsibilities before signing any agreements. If the borrower cannot meet their repayments, the lender may require the guarantor to cover the outstanding debt.
These situations can place pressure on family relationships, even when everyone enters the arrangement with the best intentions.
Before guaranteeing a loan or providing financial assistance to help someone purchase a home, seek legal advice and review your estate plan. This can help protect your interests and ensure you understand the potential consequences.
If you or someone you know needs advice, please email us at [email protected], or contact one of our offices:
- Lismore: 02 6621 2481
- Ballina: 02 6686 2522
- Byron Bay: 02 6680 8525