Parents supporting adult kids is a hot topic these days, even though it’s largely based on anecdotal evidence. It’s certainly true that millennials and Gen Xer’s are stuck with more student debt than ever. And millennials have an uphill start to their careers, especially those who graduated during the recession. But there are plenty of caveats to consider before writing a check to help your adult child buy a house.
- Put your retirement needs first. Your kids have time to save for what they want. You are closer to retirement than they are, and you don’t have as much time to save for that as they do for their house purchase. Don’t derail your retirement savings.
- Asked to be a banker? Then think like a banker. That means reviewing your child’s credit history and ability to repay a loan. ForSaleByOwner.com’s credit articles show how to correct credit missteps and accelerate savings for a home purchase down payment.
- Don’t co-sign. If your child defaults, you are on the hook for the entire debt. Don’t want two mortgages? Then don’t put your name on two sets of mortgage documents.
- Get creative. How can you help your child achiever her homeownership goals without setting yourself back financially? Consider letting your child live with you, paying monthly rent directly into a savings account. Can you carry your child on your own health insurance policy, enabling your child to save that much more for the down payment? Can your child take on a part-time job to pay down debts and save up the down payment – and you assist by providing laundry and meals?
1 comment:
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