Parents love their kids and want to help them out. Kids love being able to realise their dreams and their folks can be a big help. But sometimes ‘it’s complicated’.
With the property market moving further out of reach, flat wages and higher personal debt, financial stress is on the increase. And the risks of family loans are very real.
Thankfully, there is a smart and safe way of arranging a loan from the ‘Mum and Dad Bank’.
With the P2C® loan, Fast Debt Help can offer young home buyers the purchasing power they need right now, without needing parental guarantees or risking retirement savings.
The P2C® is a formally documented loan and therefore not a gift. There are many benefits for both generations.
- All the paperwork is handled in one transaction.
- You and your parents have flexibility to agree on the dollar amount, loan duration and initial interest rate.
- You can get the home you choose, without being limited by lock-in finance deals.
- You can still apply for the First Home Owner’s Grant or Stamp Duty concessions.
- You have access to funds lent for any worthwhile purpose: property, tuition, debt consolidation or investment.
- Your inheritance is safe from relationship rough patches like marriage breakdowns, family feuds or sibling battles.
- Your credit history is unaffected.
- You aren’t risking your family home or your life savings through giving guarantees.
- This is a secured investment with a registered Fund of over 14,000 retail investors, each receiving a monthly income.
- You can set the terms and conditions of the loan and can advance up to 105% of the property purchase price.
- You are free to waive/forgive the debt or to enforce it in future.
- You can combine the P2C® process to co-invest with other families assisting their children.
Parents who want to make a P2C® loan, though not currently cash ready, are free to borrow against their existing assets. Repayments made by the borrowers can be set to cover the lender’s own loan repayments. In this case First Debt Help recommends that you take independent financial and legal advice.
Should the borrower default on the P2C® loan, the property is subsequently sold. If there is a shortfall in this sale, the parents will lose some capital. Parents can grant a stay of recovery proceedings in relation to their investment if they wish.
Talk to Fast Debt Help today to explore the options.
Read more on the P2C® loan in How Parents Can Help Their Kids Without Losing Their House.