Given the state of the economy, the housing market and the job market, we all want to do our bit to help our kids get their feet on the property ladder. Right now, the housing market is very competitive and having a bit of extra support can make all the difference. Here are a few tips to help you help your adult children buy a home.
Help Them With A Cash Gift Or Loan
Help your child directly with a cash gift or loan. Keep in mind that there is a limit to the size of the cash gift before you face tax (It is currently $15,000 per year). That amount is per person, so you could give $15,000 to your child and $15,000 to their partner.
Loaning money to family members can lead to difficult conversations and emotional strain without proper planning. You should both draw up an agreement in writing with terms of repayment and a schedule.
Do The Research They Might Not Have Time For
Find out if your child is eligible for any benefits or grants that could help them with their home loan. If your child is serving or has served in the military, they may be eligible for a VA home loan but there are conditions that will need to be met. VA loan requirements include the length of service and the conditions in which they were under, and there are seven different types of uniformed service who can apply for a home loan.
Be A Guarantor On Their Loan
Co-sign their loan as a guarantor if you are confident that you can carry the financial burden of loan repayments. You may be subject to the same credit check that they are, so ensure that your finances and credit history are in order. Remember that any late payments will affect your credit history as well as theirs. You could get a joint mortgage or home loan but this may affect your own tax rate.
Support Them While They Save
Give your child somewhere to live while they save for their first home. It is estimated that more than half of young adults in the US are currently living with their parents. Other ways that you can support them include providing them with means of transport and helping with any childcare responsibilities. You should also educate them on the importance of having a good credit history and help them to develop good habits when it comes to keeping costs down around the home.