The "Bank of Mum and Dad" refers to the informal financial support that parents provide to their children, particularly for the purchase of a home. This concept has become an integral part of the home-buying landscape, especially as rising property prices outpace income growth.
Key Considerations for Utilizing the Bank of Mum and Dad
Impact on Borrowing CapacityAssistance from parents can significantly increase a child’s borrowing capacity by providing a larger deposit, reducing the loan amount, and potentially securing more favorable loan terms.
ConclusionThe Bank of Mum and Dad plays a crucial role in helping first-time buyers enter the property market, acting as a bridge to larger borrowing capacity and homeownership.