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  #21  
Old 13.11.2015, 17:37
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Re: Would you take a mortgage- to help you children?

I wouldn't do it - because I believe that the best lesson you can teach children is to stand on their own two feet. And an important part of that lesson, especially for this generation, is that if you cannot afford it you don't buy it.
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  #22  
Old 13.11.2015, 17:41
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Re: Would you take a mortgage- to help you children?

All interesting comments- keep them coming.

Interesting though that for parents who live in CH, with 'kids' (well mine are 40 and 42) in the UK, taking a mortgage on for them would mean reducing tax here.

Agree about ownership - but when you look at the exorbitant rents charged for low quality properties in the South of England in particular- being a rentor is no fun.
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  #23  
Old 13.11.2015, 17:46
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Re: Would you take a mortgage- to help you children?

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at the end of the day it's really not necessary to *own* your own house.
It may not be necessary, but it makes financial sense to own!
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My mortgage (when 21yo) was lower than rent - by a considerably margin.
Mortgages today are also still considerably lower than the cost of renting! Mortgages are low and now is the time to buy in Switzerland.
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when you look at the exorbitant rents charged for low quality properties in the South of England in particular- being a rentor is no fun.
Exactly. Renting low quality properties for high prices is literally throwing money away, - monthly!
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  #24  
Old 13.11.2015, 17:56
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Re: Would you take a mortgage- to help you children?

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The amount of crap that get's rammed down peoples throats too in the media about "housing crisis" and "first time buyers" is ridiculous. People need to understand that times have changed and it's not your birthright to own your own house. About 35% of people in Germany and Switzerland own their own property, you don't see any problems there.
The situation in the Uk is far more dire than in Germany or Switzzerland as the Uk population keeps on rising (largely through immigration). The reality is worse than the figures let on as there has also been internal migration with more and more people moving from the rest of the country to London and the South East. So there are more an more people competing for a limited number of houses. Prices are outpacing incomes and this means people are having to stretch harder and harder to get onto the ladder. Furthermore, with many people considering their house as their nest egg, no government would be brave enough to systematically bring down prices. It's the interests of the yopung being played against the interests of the old. Not a good sceanrio to be in.

Well, it can't go on forever.
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  #25  
Old 13.11.2015, 17:56
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Re: Would you take a mortgage- to help you children?

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Agree about ownership - but when you look at the exorbitant rents charged for low quality properties in the South of England in particular- being a rentor is no fun.
Not quite true! A few years ago, OH and I were renting a lovely Victorian flat in a very desirable area in Surrey for just under £700. A repayment mortgage on that property would be twice that amount, if we put a deposit of 10%.
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  #26  
Old 13.11.2015, 18:01
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Re: Would you take a mortgage- to help you children?

You should see prices for both rentals and purchase in Surrey now- especially near a good school and near a good railstation to commute into town !?!? How many 'few years ago'.
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  #27  
Old 13.11.2015, 18:04
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Re: Would you take a mortgage- to help you children?

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Mortgages today are also still considerably lower than the cost of renting!
Not so sure.

Firstly (in Switzerland at least) lower mortgages lead to lower rents.
Secondly, low mortgages lead to higher property prices.
When mortgages go up we will see the property bubble come down.
So if you buy now you may well be stuck with a huge debt on a property whose value is plummeting while your interest payments skyrocket.

It's much wiser to buy at the other end of the cycle. Wait for low prices and high mortgage rates. You benefit double as mortgages always come back down at some point. You benefit by paying a lower interest rate and you benefit by higher equity.
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  #28  
Old 13.11.2015, 18:08
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Re: Would you take a mortgage- to help you children?

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You should see prices for both rentals and purchase in Surrey now- especially near a good school and near a good railstation to commute into town !
Current purchase prices and rental prices in South-East England? The words sky-high and bonkers come to mind.
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Not so sure.

Firstly (in Switzerland at least) lower mortgages lead to lower rents.
Secondly, low mortgages lead to higher property prices.
When mortgages go up we will see the property bubble come down.
So if you buy now you may well be stuck with a huge debt on a property whose value is plummeting while your interest payments skyrocket.

It's much wiser to buy at the other end of the cycle. Wait for low prices and high mortgage rates. You benefit double as mortgages always come back down at some point. You benefit by paying a lower interest rate and you benefit by higher equity.
Well I have a fixed mortgage with a low interest rate and the property price was low, so I am not going to be stuck with a 'huge debt'.
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  #29  
Old 13.11.2015, 18:11
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Re: Would you take a mortgage- to help you children?

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All interesting comments- keep them coming.

Interesting though that for parents who live in CH, with 'kids' (well mine are 40 and 42) in the UK, taking a mortgage on for them would mean reducing tax here.

Agree about ownership - but when you look at the exorbitant rents charged for low quality properties in the South of England in particular- being a rentor is no fun.
Well made the decision not to buy property in the past, they had other higher priorities. If they can't make a 5% deposit in their 40's something is very wrong.

Whilst you might save some tax, there is the possibility that you would loose the house that you live in retirement. Seems like an unnecessary risk with zero upside. With exchange rate movement & possible falls in UK house price it's not as if you could get the money back by then selling the property.
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  #30  
Old 13.11.2015, 18:24
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Re: Would you take a mortgage- to help you children?

Not talking about my own kids here- this is a hypothetical question- as I read the article and wondered what we would do in those circumstances?

One 'child' has owned several houses already and done very well out of them. One has lived abroad for a long time, and now renting. As said, hypothetical in our case.

Longbyt- tell me about it! My parents helped one of my brothers again and again- and he was a real bully to them, and of course nothing in writing.
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  #31  
Old 13.11.2015, 18:30
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Re: Would you take a mortgage- to help you children?

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You should see prices for both rentals and purchase in Surrey now- especially near a good school and near a good railstation to commute into town !?!? How many 'few years ago'.
8 years ago! Take a town like Reigate in Surrey, check the prices for rents and the selling prices, to get an idea of what I am talking about. We were just about to take a mortgage with 25% deposit and a monthly repayment fee of almost £2000 for a 3 bedroom detached house. To rent it would be around £1400. And that was next to the best school in the area! There is no way a mortgage repayment (based on 10% deposit), would be cheaper than the rent on the same property!

Mortgages may have been cheaper in the past, but I bet these people were on interest only mortgages!
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  #32  
Old 13.11.2015, 18:30
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Re: Would you take a mortgage- to help you children?

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I wouldn't do it - because I believe that the best lesson you can teach children is to stand on their own two feet. And an important part of that lesson, especially for this generation, is that if you cannot afford it you don't buy it.
This. I don't consider "owing a house" a priority. If you can afford it, get one. If you can't, don't.

If it was about a medical emergency of the very expensive kind, I would take the risk. To help my children [sic] get material things? No.

Also, I am against lending money to family. Too many close experiences that ended badly. Actually, ALL of them ended badly - either the relationship strained, or the people in need never managed to get on their feet and continued pilling up family loans, because those are not as threatening as bank ones.

It doesn't mean I don't love my family.

Possibly a cultural thing.
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  #33  
Old 13.11.2015, 18:37
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Re: Would you take a mortgage- to help you children?

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Not talking about my own kids here- this is a hypothetical question- as I read the article and wondered what we would do in those circumstances?

One 'child' has owned several houses already and done very well out of them. One has lived abroad for a long time, and now renting. As said, hypothetical in our case.

Longbyt- tell me about it! My parents helped one of my brothers again and again- and he was a real bully to them, and of course nothing in writing.
It happens quite frequently that parents chip in some money for the deposit when children buy their first property. But I think there is a huge difference between plundering one's savings account or maybe selling a portfolio of shares that didn't mean much to you anyway, and actually putting your own home on the chopping block. This, especially, as other have said, with the whole unpredictability of the currency exchange thing. Look what's happening in Europe right now. We're emerging from a prolonged period of stability (and even in that period of stability we've seen the Sterling to CHF rate halve in 20 years) and now we're heading maybe into a far more troubled period. Parties of the extreme left and extreme right looking poised to sweep to power in many countries and threatening to do absurdly stupid things. Then there is the migrant thing in Germany that could lead to all sorts of troubles. Nobody is even daring to predict where this heading. Are you sure you want to be borrowing against your own house and then betting against the exchange rate mechanism in the middle of all that?

On the other hand, many people who start a business also bring in their home as a loan collateral. This is also a high risk undertaking.

It all depends on your personal level of risk aversion I guess.
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  #34  
Old 13.11.2015, 18:40
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Re: Would you take a mortgage- to help you children?

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Also, I am against lending money to family. Too many close experiences that ended badly. Actually, ALL of them ended badly - either the relationship strained, or the people in need never managed to get on their feet and continued pilling up family loans, because those are not as threatening as bank ones.

.
Absolutely,

We tend to be most blind about risks when its our own family.

I have several such black sheep in my own family who will regularly come seeking to "borrow" money promsing heaven and earth that they'll repay everything and then making a scene whe you remind them.
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  #35  
Old 13.11.2015, 18:56
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Re: Would you take a mortgage- to help you children?

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It happens quite frequently that parents chip in some money for the deposit when children buy their first property. But I think there is a huge difference between plundering one's savings account or maybe selling a portfolio of shares that didn't mean much to you anyway, and actually putting your own home on the chopping block.
Agreed- but what made me think, is that having a mortgage in Switzerland is tax deductible- so in that sense... it would make some sense! Not if parents own in the UK though.
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  #36  
Old 13.11.2015, 19:12
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Re: Would you take a mortgage- to help you children?

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Agreed- but what made me think, is that having a mortgage in Switzerland is tax deductible- so in that sense... it would make some sense! Not if parents own in the UK though.
You will also hugely benefit in tax savings if mortgage rates triple, I doubt you will see vastly higher interest rates as a good thing. I don't see the point of spending 10,000 to save 2,500 in tax. I would rather pay the tax & keep the 7,500.
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  #37  
Old 13.11.2015, 19:29
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Re: Would you take a mortgage- to help you children?

Well yes, get you. But the article is about parents in their 70s and 80s- so perhaps they feel 'well kids (!) need the money now, I can't take it with me and don't really need it now anyhow- so why not? Help them when they need it- by the time I kick the bucket they won't any more' - or to that effect.
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  #38  
Old 13.11.2015, 19:36
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Re: Would you take a mortgage- to help you children?

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Well yes, get you. But the article is about parents in their 70s and 80s- so perhaps they feel 'well kids (!) need the money now, I can't take it with me and don't really need it now anyhow- so why not? Help them when they need it- by the time I kick the bucket they won't any more' - or to that effect.
Well 10% of 65 year olds live till 100, not sure how you would feel at 99 paying interest on the mortgage for your retired children.

If the still need help at 42, they will need help at 52, 62, 72 & 82. At some point your kids have to become financially independent, the nearer they are in their 20's the better they will learn cope with life.
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  #39  
Old 13.11.2015, 19:41
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Re: Would you take a mortgage- to help you children?

You do talk tosh sometimes- but I am so glad your life has been absolutely perfect dear.

My 42 year old is doing VERY VERY well, I can assure you!
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Old 13.11.2015, 19:43
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Re: Would you take a mortgage- to help you children?

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Well 10% of 65 year olds live till 100, not sure how you would feel at 99 paying interest on the mortgage for your retired children. If the still need help at 42, they will need help at 52, 62, 72 & 82. At some point your kids have to become financially independent, the nearer they are in their 20's the better they will learn cope with life.
Exactly. Financial independance should be automatic at 18 in any case. Semi-independence financially is already possible at 16 in most cases.
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so glad your life has been perfect dear.
It's not a question of having a 'perfect life'. It is more a question of not blatantly spoon-feeding adults who should not only know better, but also be financially independent and not reliant on others!
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