How can your parents help you buy your first home?

---

 For many first home buyers, saving a deposit is one of the biggest hurdles standing between them and owning a home.

So it’s no surprise that many people ask:

“Can my parents help me buy a home?”

The answer is: potentially, yes.

There are several ways parents may be able to provide support, depending on their circumstances and the lender requirements that apply.

The tricky part is understanding how different types of support work and what impact they may have.

That’s where The Home Loan Nerds come in.

We break down the complicated home loan stuff, explain the options in plain speak, and help you understand what questions to ask before making decisions.

Because you don’t need to become a home loan nerd.

That’s our job. After all, we know a lot about home loans so you don't have to.

 Some parents provide money to their children to contribute towards their home purchase.

This may be used towards things such as:

• A property deposit
• Purchase costs
• Reducing the amount borrowed

Lenders may have requirements around gifted funds, including understanding where the money has come from and whether it needs to be evidenced.

Different lenders have different policies, so it is important to understand what applies to your situation.

 A family guarantee may allow eligible family members to use some of the equity in their own property as additional security for part of a home loan.

This may help some buyers who have a smaller deposit.

However, it is important to understand that a guarantor takes on responsibilities and potential risks.

Before entering into a guarantee arrangement, family members should understand:

• What they are agreeing to
• How their property may be affected
• When the guarantee may be released
• What happens if repayments cannot be made

Independent legal and financial advice may be appropriate before making decisions about these arrangements.

 Support does not always need to involve providing money.

Parents may also help by:

• Supporting a savings plan
• Helping reduce living costs
• Providing guidance through the buying process
• Sharing their own experience

Sometimes having a clear plan is just as valuable as having a larger deposit.