The Bank of Mum and Dad
Now a popular phrase, the Bank of Mum and Dad refers to using your parents as an easy way of borrowing money, usually interest free. It is becoming an ever more common way for people to get on the first rung of the property ladder.
Most times it's just the deposit that is contributed, however another option is for parents to actually buy the property in their name. It's not just the kids who win on this one, parents will be able to make use of tax breaks to maximise their investment.
Many parents want to help out their kids, particularly when they are at university, and helping them with accomodation is common, in fact a quarter of properties bought by one person for another to use is parents helping their offspring out whilst at Uni. In the meantime it could prove to be a profitable investment for you.
It gets complicated if you buy the house but don't put it in your name. Once the house is sold, your kids will be able to benefit from the rise in its value. Advisors recommend in cases like this, putting the property in a trust, so you keep some control over the property.
If the property is ever sold, it will be subject to Capital Gains Tax (CTG). Good news from April 2008, as CTG goes from 40% to a flat rate of 18%. Other tax benefits include Principal Private Residence Relief, Lodger Relief and Letting Relief.
Related Articles
There are so many financial companies wanting to lend you money, it is hard to know who to choose. With all the competition available it is easy to get confused and be mislead. Many high street banks and building societies can be un-competitive with their prices, even if you are a loyal customer of theirs. Most lenders do not work on loyalty so don't feel obliged to go with your usual bank.
Read on...
A mortgage is a major financial burden, but hopefully a great investment too, as property usually increases in value over the years. Because most people repay their mortgage back over a long period (the average repayment term is 25 years), it is definitely good practice to keep reassessing and checking on the suitability of your mortgage as the property market alters, just as your personal circumstances will over this extended period of time.
Read on...
There are many variables that will determine how much you will be able to borrow. Every loan will be different because of these variables which include your present personal circumstances, the lenders criteria and how much you wish to borrow.
Read on...
A New Year and a new start to your finances. It can be pretty depressing to see how much money you owe and how much interest you pay on a monthly basis. Money you could be saving or using to enjoy the finer things in life. Especially with the current credit pinch that we are feeling, as lenders tighten up their criteria and are getting tougher on missed loan re-payments, it makes absolute sense to clear your debt as soon as possible.
Read on...
Moving house can be an incredibly stressful and expensive time, and it seems that more and more people are opting to improve their homes instead of upping sticks and moving to a different house.
Read on...
Related News Items
The housing market seems to be changing day by day, well at least the reports we got to the current situation seem to be. The latest warning is for first-time buyers who are thinking about taking out a 100% mortgage to get on the property ladder.
Read on...
Predictions from experts within the property markets are forecasting what they think will happen with the value of houses in the coming year. Previously it has been predicted that property prices would drop from the current annual growth of 7% to just 1%.
Read on...
An Individual Voluntary Arrangement (also known as an IVA), is a legally binding agreement that allows people in serious debt to have their debt frozen. It is an alternative to bankruptcy, that was originally designed for small businesses, but now is popular with an increasing number of individuals who face ever increasing debt. But it isn't always suitable for some people.
Read on...
The Royal Institution of Chartered Surveyors (Rics) has reported a continuation of house prices falling. Not only are property prices gradually dropping but so to is the number of potential buyers. Enquiries about properties for sale has reduced for the tenth month running.
Read on...
As many as 1 in 3 homeowners with a mortgage could be faced with financial problems. This is about 5.5 million people across the UK who may find any further increase in mortgage costs make it very difficult for them to keep up with rising monthly repayments.
Read on...
