Would you remortgage to help your child get on the property ladder?

[SunshineonLeaves]

I’m a 50 something single parent, average earner with a mortgage, a small amount of debt (car loan) and a few thousand in savings.

DC is 22, graduated last year and working with a reasonable decent salary. They are desperate to move out with partner and have saved a fair bit towards a deposit but it’s not enough. I don’t have enough savings to help them, their Dad can’t/wont and same for partner’s parents.

If I remortgaged my payments would obviously increase and I’d be taking on more debt but it would mean I could help them. Trouble is it’s taken me years to get in a half decent position financially and I’m concerned how it will affect my future - not getting any younger etc.

Would you help or should they make their own way?

Absolutely not

If they seriously want to save, nothing to stop them working hard and getting promotion, or taking 2nd jobs or starting a side hustle for extra money as well as cutting spends as they live at home.

You could offer them space and take a few weekend breaks so they have your house to themselves - off peak season being cheaper - I think this would be a better use of your money than paying lots more mortgage, as at least you'd get a break away to enjoy.

By the age of 26, I was earning more than one of my parents. Took me to 35 to out earn the other. However I never quite managed to accumulate as much pension as they did - both had excellent final salary pensions of the type no longer available, and I took a break (kids).

One thing you might consider is remortgaging in order to release enough funds (30-40% of purchase price) for a buy-to-let mortgage on a property that would still be in your name.

I don't think this is good advice.

OP would then have an even bigger mortgage on her home plus a mortgage on the second property. The income from which would be taxable.

And the young couple would be paying tent which OP wants to avoid.

No. I would also hope I've raised my children to not want me to work past retirement age to give them something they can earn for themselves.

I've spoken to DC and they completely understand - they do pay rent here but much less than the going rate plus I am at my partner's most weekends so they have the place to themselves. I think they get a pretty good deal and they do see that, it's frustrating all round but I think many people their age are in a similar position.

No

They can get a room in a house share and save up. That is what I and most of my friends did at their age.

I lived with my MIL until age 26- so age 23 to 26.

We bought with our savings. DH was 29 then. This was in 2019.

We are considered the lucky ones. DH's sister is dong this at 32 with a baby and her DH is 35! think about how it is like for them.

Your child will survive, he or she will probably be able to move out at 25 into their own place and that is far younger than the average FTB

flatshare in London is now £1000 so depends on where they are. even in places like cardiff it can be over £600, there was a young guy in the news today who said he would save 1k per month living at home.

I was thinking- dh and i saved 20k per year living at home from 2016 to 2019 in London, admittedly we didn't earn so well for most of that time. but basically re rent vs wages, cardiff today is the equivalent of London in 2016.

I'm quite surprised that my financial position isn't seen as very good - I thought I was doing quite well :(

It was you who described your financial situation as "half decent."

You're doing fine but you are jepordising your future if you remortgage to help your DC buy a house. There really us no rush.

No

No way. I have a mortgage of my own that will be paid off before I die. When I kick the bucket, kids can sell the property & split in half proceeds. That will be what helps (or doesn't) them get a foot on the ladder.

No.

I'm a 61yo with a ds doing his a'levels. I might downsize in a few years and possibly think about helping him in future, but not at 22.

They need to put a bit of effort in themselves, and make a few sacrifices, before expecting it to be handed to them on a plate.

What's your pension looking like? That would be my biggest consideration in this. We've recently remortgaged to support DC with school fees which obvs means our mortgage is a bit higher than before (we're mid 40s) but it's something we feel comfortable with as we still expect to repay it before we're 60 (ideally at 57 with tax free lump sum from pension). And crucially we're still able to fund pensions at a pretty high level so all going well will retire in our early 60s with a decent sum.
If by remortgaging you would still be able to repay your mortgage by, say, 65 and have a nice pension pot, then maybe you can. But if you risk either of those things by doing it, don't.

I wouldn't in your position but would you be able to save the rent they are paying you for a year or two and give it back to them as a deposit? Or at least save the amount that would have been the extra on the mortgage.

Absolutely not.

Can you afford to save their rent ?
My friends in laws did this and handed them £££ when they wanted to buy.

No chance.

No. I really don’t think that’s wise. I also think equity release is the next financial scandal. The hard sell on daytime tv doesn’t present the reality of elders going into debt. Ending up with not enough money for their care.

Could they look into housesitting/petsitting/property guardianship to have some experience of living as a couple without the expense?

Don’t remortgage. They can live where they can afford and save up themselves. Don’t let them pressure you. They need to live within their means.

Absolutely not. 22? They're having a laugh. I just googled and the average age of first time buyers in the UK is 33.

They can save up and wait till they're older. If they really want to move out together, they can rent for a while, and if they can't save money while they are renting, tough. They'll have to work to earn more, and/or wait some more.

I'm not unsympathetic to costs for young people, but in this case it would be a hard no from me.

No way. You don't sound like your really in a position too. They are only 22. They have time to save.

No as you don't know what own future will bring health wise.
Overpay your own mortgage instead

The best thing you could do for your child would be to not charge them rent whilst they save if you can afford to do so