Will our children be able to afford a mortgage the way interest rates are going up. What can we do to plan for our childrens future to get them on the property ladder

__________________
Promote your business for free and sell anything for free www.tradingmanchester.co.uk

Start saving now.

That was a big question in the late 70's and early 80's when mortgages were 10-14%. It caused houses to stagnate in their appreciation values because no one could afford the payments.

As individuals incomes began to grow and rates began to fall throughout the later 80's, property values began to move up once again. For about 10-15 years the growth of income and property values stayed somewhat in step with one another.

Over the past 3-4 years, 40 year record low interest rates and sub-prime payment levels have encouraged buyers to buy more house than they could really afford and the price of houses has ballooned in many markets to the point of bursting. Rates have gradually been increased which has slowed the appreciation rate, and in some cases we are now seeing depreciation of house prices in order for a seller to move a property.

In other words, this is all cyclical stuff. We are asking the same questions our parents asked 30 years ago, yet somehow people still buy houses, just at a different pace. Sometimes we get more for our dollars, sometimes we get less. This was a plan created a few generations ago when the bankers created what they called, "flexible currency".

Real estate tends to grow on "average" an amount equal to the rate of inflation. Sometimes there is a jump because of development in a particular area, but that is cause by an upgrade of the "best use scenario". Property in a sense has replaced gold as the standard for our economic value.

let's hope inflation doesn't become to much of a burdon.

To save your children future start saving your money.

__________________
Reverse Mortgage
Reverse mortgage Canada

Tough question. It's looking that credit will be tighter & capital more in demand as time goes on, especially now that developing nations like China & India are really taking off.

__________________
Calculate the present-day value of your structured settlement or other cash flow
Amortization calculator

lightload, the children of today, and I am referring to young adults in the 20 to 25 age bracket when leaving home expect and perhaps even demand they walk out their parents front door and into their front door with ALL the amenities of their parents home that took their parents years to amass.

They WILL NOT settle for less as they think it's some sort of disease to not have all the trappings and comforts of their youth and their parent's home.

They could buy a first home that needs a lot of work for under market value but they view that as living in a slum. What would their "friends" think?

They could find a reliable used car for $3,000 to $5,000 but no they insist on the $30,000 to $40,000 brand spanking new SUV.

They could buy used furniture for pennies on the dollar but with no payments until 2009 from Rooms-to-Go,.......why bother?

My point here is that young adults bury themselves into debt before they even get started.

The best thing we could do as parents.... "to plan for our children’s future to get them on the property ladder" .....would be to lower their expectations and instill in them it's financially foolish to incur massive debt on worthless things to give the outward appearance of affluence.

My 3 cents on this thread.

__________________
Gary Spicuzza, *SAFE
Copyright 1956
No Rights Reserved
*Self Appointed Financial Expert

The real problem, in my opinion, is that about 95% of parents have a very poor financial education or financial foundation to begin with so any advice or help they can give their children will set them up for the debt trap as well.

It is like two blind people in a city which try to explain to each other how to get from point A to point B.

Children learn from their parents and since the majority of parents have very weak financial intelligence to begin with their children are likely to load up on debt and purchase liabilites (in the worst case mistaking them for assets).

If parents just save then that is dead money, to put money in a savings account at your local bank is a very poor finacial move but in the end I guess you can argue that it is better then nothing at all.

__________________
It is not smart to play it safe but it is safe to play it smart.

In BC I would be more concerned about finded a home period. The boom in BC combined with the labour problems means that smaller homes meant for working class people aren't being built.

People are flooding to BC to retire, and most of the construction workers are working on big construction projects. It's nearly immposible to enter the market.