More Parents Helping Kids Buy Homes

A survey by Better Homes and Gardens Real Estate indicates that 20 percent of Baby Boomers have helped at least one of their children achieve homeownership by purchasing a home for them, co-signing a mortgage, or contributing to the down payment. Another 68 percent of those polled plan to help their children or grandchildren become homeowners down the road. Experts attribute the trend to low home prices, parents wanting to provide some stability in their children’s lives, and the fact that their children lack the cash to make home purchases. These parents recognize that cash transactions offer better deals and quick closings, or they understand that their children cannot afford a 20 percent down payment or have freelance or part-time jobs that are frowned upon by lenders. However, experts insist that parents should not jeopardize their budgets or their retirement by helping offspring to become homeowners and say they should make sure their children can afford the monthly costs and other expenses that accompany homeownership. Moreover, if they are offering a loan — not a gift — they should put it in writing. | Read More