Last month, I took my 4-year-old daughter to our local bank to open the first savings account. To help us around the house with his hard work, Addy made a fortune of $ 12.44, which he passionately delivered to the bank teller as his first deposit. It was a proud moment for me as a father, and for Eddie, it was his first taste of financial decision-making.
It is important to know that we, as business leaders of the next generation, are financially responsible. We are in the business world where the goal sometimes seems to be to start a startup to raise a pool of money rather than create real-value companies. Money that people don’t have is spent, but if we can educate and empower the next generation to be responsible, it can save a lot of headaches and disappointments in the future.
young home buyers may be stuck due to rising home rates, a web of student debt, and stringent mortgage requirements.
According to the National Association of Realtors, most of the first home buyers use cash gift from their parents to buy a house for them. Whereas, some of them used loans too. But for beginners, it may be impossible sometime.
Every parent has the desire to make their kids successful. One of the common indications is to have their own house. It is such a blessing to help them grow, having their own home or apartment. If you also want to see your kid as a homeowner, then this article must be useful for you.
Here, we have discussed How Parents Can Help Their Kids Become Homeowners. So, what are you waiting for now? Let us start!!!
Help With the Down Payment
Maybe, your child may have well settled, credit and good income with six zeros. But if they want to buy their own house, then they must have down payment cash in hand. Otherwise, they have to go through a hard situation while home loans. Today, most of the banks don’t exceed a hundred percent credit on the cost of the house. The down payment requirement may vary from 3 ½ percent to 20 percent. Mainly, it depends on which type of loan you are getting. Whether it is a traditional loan or USDA loans. But if you can pay down payment for your kid’s house, then he/she will become able to get a home loan with proper credit.
Pay the Closing Costs
Closing cost is the amount that is lower than the down payment but can be more than your child has available. If you want to help your child, then you can pay some portion or all of the closing cost. It is one of the most essential and needy cash in many situations. As a parent, if you pay this, then it can be a tremendous job.
Get the Loan Yourself
One of the best option to help your child to get a loan yourself and let him pay to you. There will be higher chances of getting a better rate and lowest down payment in comparison to your child. It will be more accessible to your child to get loan indirectly and to buy his/her own house. It has one more advantage that if sometime, your child will not be able to pay down payment or missed payment, then you can continue to make payments.
Become a Co-signer
If you are not able to help your child financially, then you can become Co-signer for him. It doesn’t require any cash to pay. Your child will be responsible for making down payment at the time. Only one risk here is for you that if your child wouldn’t pay or came as a defaulter then, it will damage your credit unless you take over the payments.
Final words:
We hope that you are satisfied with the ways are above given for How Parents Can Help Their Kids Become Homeowners? Your child also becomes a homeowner in today’s costly and full of competition market. Only you have to make little help for him/her. It may be the most valuable gift from you as a parent to your child.