Ask Paul: Should I give my son $100,000 for his mortgage
Q. I would like to give my son $100,000 to assist with his home loan.
Can I do this as a gift? If not, can I go guarantor for his home loan? How long am I tied in as guarantor? - Peter
A.: Hi, Peter, that is a good thing to be able to do for your son, but there are as many risks involved in this situation as wandering around a minefield.
The possibility of you going guarantor frankly terrifies me: your obligations would be for as long as the home loan existed and I would not recommend you pursue this route without first speaking to a solicitor.
The gift also worries me.
If your son has a financial issue or even a relationship break-up, the generous gift of your money is at risk.
So my preferred option here is a documented loan to your son. In time to come you may choose to turn this into a gift for your son that need not be repaid, but a loan arrangement protects your son and the $100,000 from unexpected life events that may arise down the track.
Again, you should chat to a solicitor about this to be on the safe side.