More and more Americans find it hard to buy their first homes. Indeed, affordable properties for households with an annual income of $75,000 to $100,000 are becoming increasingly rare in the real estate market. Besides, for many prospective buyers, their income isn’t enough for a pre-approved mortgage and a downpayment. As a result, many Americans prefer to remain in tenancy agreements because they are unsure how to approach home ownership. But as a parent, you can assist your adult child in buying their first home.
Are you looking for ways to assist your adult child in becoming a first-time homeowner? If so, you’ve come to the right place! In this blog post, we will provide helpful tips on how to make their first home more affordable and manageable on a tight budget.
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Help Them Look for the Right Property
When helping your adult child find the right property, it’s important to provide them with the right information and advice. First, make sure that you discuss the different types of properties available, such as townhouses, single-family homes, condos, and more. Talk about their budget and what types of properties are within their price range. It’s important to help them narrow down their choices and find a property that fits their needs. For instance, first-time homeowners with no children can take their first step on the property ladder by considering 1 bedroom house plans. They can gradually climb the property ladder by using their first home to finance the next home, and so on.
Provide Strategies to Save Money Every Month
When it comes to purchasing a home, saving money is crucial. Having enough money to make your monthly mortgage payments and cover any maintenance costs that arise is essential for keeping your house in good condition. With that in mind, you can help your adult child with tips and strategies you’ve learned from experience:
- Removing unnecessary subscriptions
- Using cash for purchases rather than credit cards — This will ensure they don’t run the risk of maxing out their credit cards or spending more than they can afford.
- Consolidating debts — One single payment to make is a lot more manageable than multiple payments. Besides, debt consolidation can also save up a lot of money on interest.
- Creating a budget and sticking to it
Help Them With the Downpayment
For many first-time home buyers, coming up with a downpayment for a home can be one of the biggest financial challenges. It’s not uncommon for first-time homebuyers to put down less than 20% of the purchase price. This leaves them paying a large amount of interest over time on their loan.
As a parent, you can help your child become a homeowner more quickly by helping with the down payment.
Consider providing your child with a loan for the down payment. This can help them buy a home faster and begin building equity right away. Be sure to discuss repayment options with your child and draw up a written agreement outlining how they will repay the loan.
Make a cash gift toward the downpayment to help your child own a home. There are tax implications associated with gifting money, so consult a tax professional to ensure you understand the rules and regulations.
Taking these steps can help make the dream of homeownership a reality for many young adults.
Are you ready to support your child through the purchase of their first home? Sometimes, it doesn’t take much to make a big difference, whether you contribute to the downpayment or provide helpful tips.