Take your own dreams into account

Remember that a good rule of thumb is to only give what you can afford, both today and tomorrow:  Don’t risk your future dreams and plans.

Take the time to assess your risks, and understand what you can REALLY afford.

This article is a 6 minute read.

It’s great to help your children but don’t risk your financial future or relationship with them.

Inviva has worked with risk experts to help people understand some of the risks of lending money to family.

The risk assessment questionnaire below is designed to guide you through the risks and implications when helping your child. The emphasis is on risks (bad things that could go wrong) rather than returns (great things that result when all goes well).

While some of these questions may be confronting, they could stop family heartbreak and financial catastrophes down the track.

A guideline for determining how much you can afford to help is to only lend what you can afford to lose!

This risk questionnaire consists of two parts:

  • The non-financial area is checking that the relationship between you and your child is strong enough to weather any storms that may occur.
  • Checking your financial capacity is able to withstand the catastrophic event that the child doesn’t make repayments.

Relationship Risk

Reason for lending
Financial Risk appetite
Relationship obligation
Resolution of conflict with family
Repayment Issues – response by child
Rules – tax and legal

Financial Risk

Right loan amounts and concentration of funds
Repayment reserves
Risk of concentration
Ramping of payments
Rule of thumb

Take the questionnaire now

CLICK HERE to download and fill in the questions or keep reading to understand more.

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Further reading...

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Find out the value of your property and how much home equity you can access.

Cool couple enjoying their own home
Helpful resources
Parent’s Risk Guidance Questionnaire
Case study - Made to feel Guilty
Considering using the Equity in your home?

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Access the equity in your home as a lump sum for five years with the certainty of a fixed interest rate.

2Be Equity Advantage loans are based on your assets and credit history: not your job or income status.
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