Are you purchasing a home with your parents’ help? See this first.

Is it a good idea for parents to help their kids buy a home? It’s a big financial decision, but these two questions will help you make the right choice for you: What’s the best way for parents to help their kids purchase a house, and what are the benefits that come with it? 

The Austin housing market is competitive and relatively expensive. For first-time homebuyers, it may be harder to purchase a property. Having your parents’ help to get into our market would be a huge advantage. After all, the sooner you can own a home, the faster you can build wealth.

“Having your parents join you on the home buying journey will strengthen your relationship with them.”

I’m not a CPA, a mortgage lender, nor an attorney, but I know a few creative ways for parents to do this. First is by giving a “gift” of up to 20% of the down payment on the home. It’s not a loan, but the lender will require a gift letter for it. This helps you get into the home easier and will remove the private mortgage insurance (PMI) from your purchasing costs. The second way is having your parents loan you some money so you can become a cash buyer. This method essentially makes your parents your lender. Last, the parents can co-sign on the mortgage. I recommend your refinance the home and remove your parents from the cosign at some point. 

Purchasing a house is a milestone and one of the entry points to becoming an adult. Having your parents join you on the home-buying journey will strengthen your relationship with them and help you build long-term wealth

If you have more questions about this topic or have any real estate questions, don’t hesitate to call or email me. I’d love to connect with you.