Rising prices in homes for sale have made it harder for many looking to buy their first home. This is especially common for adults between the ages of 20 to 38.
One of the biggest obstacles many are facing is saving up for a down payment, especially if there is pressure on buyers to put more cash up front. This trend is prompting many parents to step in and help their children buy a home. Whether it’s a gift, or some form of aid, it pays for parents to consider how to best aid their children without placing their own financial well-being at risk.
Here are some factors parents should consider when helping their children buy their home :
– Assess your finances : Parents may be tempted to pitch in financially to help get their children into their first home, but they shouldn’t do so without going over their own finances and making sure they can afford to live without the funds.
– Go with cash : It’s better to go with cash rather than money from a savings because it’s likely not earning much in the way of interest, so you’re not losing much in potential gains on money.
– Make it a gift : Instead of taking out a loan to help your child, maybe you can afford to give them a BIG gift, so they aren’t expecting to pay it back.
– Consider alternatives : Parents can help their children by giving them a financial leg up on their home purchase, but they can also help with exploring down payment assistance programs or local charities for contributions.
