Twenty 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 downpayment, according to a survey by Better Homes and Gardens Real Estate.
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 necessary cash to make home purchases. These parents recognize that cash transactions offer better deals and quicker closings, or they know their children cannot afford a 20 percent downpayment or have a type of job, such as freelance or part-time, frowned upon by lenders.
So parents, want to help your adult children? Do not jeopardize your budgets or your retirement by helping your children become homeowners. Also be sure your children can afford the monthly costs and other expenses that accompany homeownership. Also, if you are offering a loan – not a gift – put it in writing.
Source: CNNMoney, Better Homes and Gardens Real Estate,Les Christie, Les
