Podcasts Business Your First Home Buyer Guide Podcast The Bank of Mum and Dad: Examining the Opportunities and Potential Pitfalls

The Bank of Mum and Dad: Examining the Opportunities and Potential Pitfalls

Published: July 18, 2023, 7 p.m.

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How does parental assistance impact the affordability and accessibility of housing for first-time buyers? Do alternative financing options offered by parents create an imbalance in the housing market? As the fifth biggest lender in Australia, the bank of mum and dad has become a viable option for financing, particularly for first home buyers.

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We take a closer look at this option with the guidance of our expert guest, Jenny Fagg \\u2014 CEO and co-founder of 2Be. Jenny, who we are honoured to be here with today, provides valuable insights into the various financing options available to first home buyers and offers a balanced perspective on the potential advantages and considerations of parental assistance.

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Understand the complexities behind how parental support can influence your home-buying journey as we delve into its effects on affordability and accessibility. We explore the ways in which financial help from parents can help overcome rising property prices and stringent lending criteria. At the same time, we discuss the potential implications of alternative financing options, such as an imbalance in the housing market.

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If you\'re a first home buyer eager to understand how your parents can help you achieve your homeownership dreams, this episode is a must-listen. Gain a comprehensive understanding of how parental support can influence your home-buying journey and explore the potential benefits and challenges associated with it.

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Episode Highlights:

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00:00 - Welcome

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02:47 - What is 2Be?

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04:18 - Is it only the really wealthy who can get help from the bank of mum and dad?

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06:35 - Borrowing against investment properties

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10:45 - Explaining a reverse mortgage and the repayment options for the bank of mum and dad

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14:54 - Paying back the parents \\u2013 what are the terms?

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20:04 - The opportunity cost of not getting into the market earlier

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24:44 - Six tips for understanding the risks of parents lending to their children

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36:43 - What if something unforeseen happens to the parents and they have to sell?

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42:54 - Maximum proportion of the value that Jenny would offer access to out of the program

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45:21 - What Jenny wishes she knew as a first home buyer

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About Jenny Fagg:

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Jenny Fagg is one of the founders of 2Be Finance Pty Ltd, a financing company that offers home equity loans for over 55s. Prior to this, Jenny served as CEO and Managing Director of ANZ National Bank Limited. She holds a PhD in Management (Risk) and a Bachelor of Economics (First Class Honours in Organisational Psychology).

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Connect with Jenny Fagg:

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Resources mentioned in this episode:

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If you enjoyed today\\u2019s podcast, don\\u2019t forget to subscribe, rate, and share the show! There\\u2019s more to come, so we hope to have you along with us on this journey!

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