The 2018 Budget to Benefit Millennials through Credi’s ‘Bank of Mum and Dad’

KEY TAKEAWAYS:

• Now next-gen Australians have an alternative option that enables them to invest in a new home without having to depend on conventional banks, instead using the ‘Bank of Mum and Dad’.
• This unique bank offers an option to Baby Boomers to channel the tax savings from their earnings in a way that would enable the millennials to invest in property.
• Overall it is a flexible option that offers better tax rates and many other advantages.

First-time home buyers in Australia might have been left out in the cold by the 2018 budget, but this has turned out to be a blessing in disguise as it has opened new channels of financing that were hitherto unheard of.

With the government having dashed all hopes of support or relief, the onus is now on the Baby Boomers to provide assistance to the younger generation through an unconventional source, namely ‘The Bank of Mum and Dad’.

While parents are willing to recycle the tax benefits of their earnings to help their children buy a new house, search is on to identify a cost-effective method of channelling the earnings so that the usual pitfalls associated with shifting huge amounts can be duly avoided. To this effect, the Bank of Mum and Dad comes across as an alternative that provides a win-win
situation for both parties.

Ranked among the top 10 financial institutions in Australia, one of the primary reasons as to why many consider this as being attractive is because it offers low rates of interest. As a result, the younger generation can invest in real estate by availing a home buyer’s grant and avoiding mortgage by providing a large enough deposit.

However, there is a downside to the situation too, namely in form of missed loan repayments and disputes arising that might cause a strain in personal relationships. The solution to this is to draw agreements with clear terms and conditions for management and repayment of the loan. So, if handled correctly, this could work out to everyone’s advantage courtesy of offering better rates and flexible structure.

About Credi Pty Ltd

If you’ve ever loaned your children money you are officially a branch manager of “The Bank of Mum and Dad”. You are also a part of one of fast-growing sectors of the Australian economy. Credi.com was born out of the pressing need to document loans between family members, friends and businesses. It removes the stress, the embarrassment and the risk of legal action, formalising a loan within minutes and without a scrap of costly, time-consuming paperwork.

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