Q.
Buying for future generation? What for?
A.
My UKM friend (Mike) has emphasized that he would not finance his children to expensive private university which is just not his style! Life is more than just paying for tuition fees. Children must learn their way in life. Nothing is spoon fed!
Yet, I see parents going extra mile buying properties for their children. Some before children are even schooling. The mentality is everyone needs a roof and property will be unaffordable in the future. So, better be prepared and get a good deal now. Regret if you let the opportunity pass this time!
This is a very subjective topic to discuss. For, everyone has soft spot for own children. You want to give the best to them. Moreover, property is a sure thing for a roof over the head is a basic need. Buying at inflated price? This is the other side of the coin. Can your child pay the instalment? Does he or she want to even pay for it?
These are big questions. I have heard many who gave the first down payment for a house and the child continue to pay for the property as he or she move along in life. Is this truly necessary? I don’t know.
Can it be done? Yes, it can. How to do it?
When a parent wants to "pass on" the property to his children to service the loan, the bank allows such arrangement. However, there are few considerations:
- The child is currently secured in a professional education which will soon see him earning a living out of such profession. For example, medicine, engineering or law.
- The working parent is able to continue paying for the loan in case prolonged education for the child. Age of parent is a factor.
- That the parent can be guarantor to the child after graduation or taking over.
Ultimately it is a matter of affordability. Is the budget reasonable? You don’t want your child to suffer paying through his nose a property which does not serve his needs. In today’s scenario, needs and wants are blurred with pride and prejudice (landed vs strata).