I find it very surprising you so flippantly say ...you can choose to act as guarantor for their home loan without a rider explaining they need to get sound advice! There have been MANY disasters where parents have been on the hook for their kids' loan when things go wrong!!

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It says you CAN. It doesn't say you SHOULD.

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Yes, I realise that, but I still feel any responsible article should also state after that comment what that might entail for them, especially as it says earlier in the paragraph "If you don't have the cash to loan them..." Could be financial suicide for those not wary or knowledgeable enough of financial matters.

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Yes I fully agree with Alan MacDonald. If someone needs a guarantor it means that banks etc don't think they are a good risk. Going guarantor means you will pay it in the event of something going wrong. This could mean losing your own assets or even your own home. This has sadly happened too many times to parents who just wanted to help.

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I agree entirely Alan. The guarantor line made me cringe. I've read many articles by respected financial gurus who always stipulate getting advise to mitigate possible poor outcomes.

The author should probably also have a disclaimer stating they are not trained in law.

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When our son and his then-new wife were renting, we helped met the 20% deposit to help them as a loan, saving the payment of annual Mortgage insurance. At that point in time, they suggested for security that one of us have our name in the mortgage (a mistake we later realised but rectified through transfer of ownership to them)! They paid interest-only on the mortgage, not as initially hoped that they would pay off (helped by low interest rate) as quickly as possible as they both had good income. The relationship ended in a divorce, his ex-wife objected to reducing the 50-50 settlement after deducting our loan. Bank statements did not show the full purchase price of the property, only the amount the mortgage was taken out. Lesson learnt. No loan to children; it's hard to resist helping them when we as parents could see them struggling.

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Yes, be very careful in this area. I intend to do similar, but there are official documents you can purchase online (no way they'll let me post a link!) that is a legally-binding loan document. They are $99 and from an actual law firm. This would be proof enough to stand up in court. You can make the terms whatever you like including the interest payments - as much or as little as you like!

Also, be careful of putting your name on the mortgage as if you wish to transfer the loan/property to them later, you could be liable for CGT.

As always, get good advice - BEFORE you do anything, not after :-)

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Indeed, wish I knew!

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I think Guardians should support their kids when they are growing up. If possible during their first schooling to find their job. After that when they stand on their own feet with all consequences. Without facing the consequences of their activities they won't get the hang of anything. Parents should give a lesson to their children about savings. My family is lives a frugal lifestyle, we can maximum tried to save our money. Whenever we want to buy anything, we always try to get a discount on that thing. And for that we normally use online couponing websites. Guardians must have a sort of self-loving feeling. They are not responsible for the lives of their grown-up youngsters. It can be tough, however, that is my feeling.

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