My sons want to buy an investment property but they can only get a loan if my husband and I go guarentor. My husband thinks we may eventually loose our home. If if if the house is not rented for a long period of time, or if one or both our sons loose their jobs?
any suggestions?
LynHi,
Personally I’m not a big fan of putting my property up as security for other people. There is an old adage that says never lend to friends and family. I have ignored that in the past and it has only added friction to the relationship.In my personal belief the first step to being an investor is being a saver. To be able to maintain the debt that forms a part of pretty much every investment one must first be able to produce enough spare income. So I’d say save up enough for the property. Besides, if you’ve got enough equity that they can use it to buy investments, why don’t you use it yourself to help with your own future?
That’s just my opinion based on my knowledge and experience. I have no idea of how your family works or how close you each are.
thanks – it helps to get another opinion.
I work part time – my husband has retired – and we own our home.Lyn,
It’s great that your sons want to buy property.
I understang your fears of putting your home on the line. Maybe the sons could get aloan from another lender,, maybe they should see a finance broker or maybe they need to save some more before they can get aloan, maybe the parents could give a grant of some $.
Hope you find a solution, good luck.
hrm
Be careful, as your husband is right – it it all goes pearshaped, your home is collateral too and may be claimed by the bank.
Family and business are a poor mix, in my personal opinion.
Get them to save a deposit, or if they are desperate to start, look at how they can raise the cash themselves. Instead of mortgaging your future, spend $30 and buy Steve’s second book – in that a couple who were very far in debt bought several properties over the course of a year by applying themselves and their ingenuity. They have a much better chance of making and holding onto wealth if they have to do the work themselves.
Above all, get them to get good advice on this.
(You might want to read the book yourselves as well!) [biggrin]
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