Ask Helen
Helen Lederer Celebrity agony aunt gives you her heartfelt advice every week
My husband and I were surprised when our grown-up son unexpectedly asked if he could borrow £20,000 as a deposit on a new house! To be fair to him, he had worked out interest and is keen to repay the loan, but it’s a lot of money and we’re worried that he’s over his head financially as it is. How do we say that we don’t think this is a good idea, without having him hate us forever?
The bank of mum and dad is accessed by so many children nowadays – well, not children but young adults – and in this economic climate it’s increasingly common for parents to provide for their offspring to the limits of their ability. However, this outlay may come with understandable worry and concern. It’s a sad fact that more of our grown-up children still live at home, denied the home ownership and independence enoyed by the older generation.
The good news is that your son has sensibly done the sums, put a financial plan together, and fully intends to pay back your loan, with interest. While this shows maturity and respect, I can understand that you need to be sure lending such a large sum of money is the right thing to do. You need to know all about your son’s affairs. How much is the house, can he really afford the repayments, what are his work prospects, does he have insurance against loss of income? If these are answered to your satisfaction then go ahead if you want to. If, on the other hand, you feel it is the wrong time for this outlay, why not offer to pay for a financial adviser to consider other ways forward? Good luck!