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NEW YORK (Money) -- I could not have bought my first house long ago without borrowing the down payment from Mom and Dad. Their loan got me started down the home-equity path, and it's paid dividends ever since.
I think it's nice when parents help out their kids in buying a house.
It's a parents job to make sure their kids get settled in life. And it doesn't always have to be money. It could be good advice on how to save, find a spouse, or land a job.
My mom helped with a loan for my husband and me back in the 70's so we could buy our first home. This was just a couple of years after she was widowed. We paid it back in about a year or two.
We have helped our kids also, but pretty much outright gave the money. I feel that this is the time that they need it, not when we pass on and they are already in their 60's. Some of my friends feel this is wrong and we have spoiled them, but these are much different times
My parents would look at me quite strangely if I asked for help on a down payment for a house. In fact, they'd probably call the nearest psychiatric center to get my head examined.
If we want to help the kids with a house I would rather GIVE them the money than loan it. The borrower is slave to the lender and who wants to have that mixed in with family relationships?? Besides, if they can't afford a down payment or if the bank won't give them the money why should I take on the risk by loaning or cosigning? Maybe they need to rent a while and save some more money.
Families should do what they can to help each other. Whether it's parents helping kids or vice versa when the parents get older. I think that is becoming more clear during these economic times.
Families should do what they can to help each other. Whether it's parents helping kids or vice versa when the parents get older. I think that is becoming more clear during these economic times.
True, but one must be careful that they are really 'helping'.
We have learned this from experience, after both loaning and giving to family members who ended up no better off and actually might have made better decisions had we not 'helped' them. The article is good in that it points out the dangers and cons of loaning to family members.
DH and I have pretty much decided that we will never LOAN money again...if we feel it is necessary and really a blessing we will give a gift instead. However, in many cases there may be better ways to help than just writing a check.
My parents gave me the down payment for my first, very modest house. And paid for a roof on the second, very modest house when I needed to put one on to get insurance to be able to close. They were very generous and I thanked them for it. It didn't ruin me in any way.
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