REALTOR® Magazine-Daily News-How to Help the Kids Buy First Home

OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®

Search REALTORMag...

OR FOCUS YOUR SEARCH

NEWS & COMMENTARY

Inside For Brokers

Connect

Social Networking

Follow, fan, or friend us online.

Your Magazine

Magnifying your voice and celebrating your accomplishments

CURRENT ISSUE

PAST ISSUES

Daily Real Estate News | March 24, 2008 | How to Help the Kids Buy First Home
Helping the kids buy a first home is a time-honored tradition that has become even more significant as home prices rise and incomes flatten.

Here are three ways parents can help their children:

Cash. For parents with the means, cash is clean and easy. An individual can give $12,000 a year to a recipient without having to pay a tax on the gift. Therefore, a couple could give an adult child and the child's spouse a total of $48,000 in one year. To keep things simple, the gift is best given well in advance of the mortgage application.

Cosigning or otherwise jointly investing in the property. This can work for parents of more limited means or those who want to be paid back. The biggest risk is that the offspring will be unable to meet their obligations and it will affect the parent’s credit rating.

Knowledge and hard work are worth gold. Parents who can’t afford to help financially may be able to provide experience and even some sweat equity to help the kids make a smart housing choice.