Helping daughter into property
Question from Nikki updated on 1st October 2013:
My husband and I are looking at investing in an Auckland property with our daughter and her partner to enable them to enter the market. They will live in the house and rent the other rooms. We have sufficient cash deposit for a property whereas they have very little. What would be the best way to structure the purchase? Should we each have our own respective mortgages which we pay at our own pace (and be on the title as tenants in common) or should we use an alternative vehicle such as a company or trust and raise the funds through that as one loan? Any advice welcome.
Our expert Kris Pedersen responded:
It will be one mortgage but you can split this into two or more parts. Note that the mortgage will be joint and several meaning that if the kids don't pay the bank still can sell the house up and chase you for the money. Definitely have a discussion with a solicitor who can advise you the risks involved and the best way to put this together. I also recommend that you have a written joint venture type of document that stipulates what happens if one party wants out of the agreement.
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz
Search the Ask an Expert archive
Browse all questions in the Ask An Expert Archive »