We gave our son part of the money we did not spend on his college education once he was established in a career that could support a home purchase. It was an outright gift with no expectation of repayment. He has since sold that townhome and purchased a house with no further assistance from us. I'm glad we did it.

We have helped with a home purchase as a gift and had no second thoughts. Our first home was purchased in part with similar gifts from both our parents. We were grateful then and have followed suit with our children.

We helped with the down payment for both of our kids. We then gave them the choice of either paying us back a certain amt each month at 0% interest OR taking it as part of their inheritance. They both chose to pay us back so as to give them the option of borrowing it again if necessary. One son and his wife just sold their first purchase to buy something bigger and closer to both sets of parents with no help from us although it was offered.

Oh, this is so encouraging! This is all in line with what we are thinking. It would be a gift and not a loan. Our 26 DD has worked so hard and saved what would be an impressive down in many markets, but here in Austin she just keeps falling behind. And being a city, there are some areas that are safer (more expensive) than others). We are thinking that if we help her with a down, she can keep the mortgage within her budget, but live in a safer neighborhood.

My parents loaned us the money for the down payment on our house. There was no formal agreement, no papers signed. We paid them back.

We offered a monetary gift when our son and DDIL withdrew an offer on a place because they felt they were cutting things too close. They had both worked so hard (both have advanced degrees and excellent jobs, have saved for years to fund their retirement, savings accounts and their children's education funds. We could never, ever fault them for their spending habits as they are very frugal) but, in spite of all that, they couldn't keep up with the market in their city. At that point we offered them an amount that would keep their monthly payments comfortable. Absolutely NO regrets and it makes us so happy to visit them and see them so happy in their new place. They express their heartfelt appreciation at every opportunity.

No kids so can't answer the question directly. However I can say my husband's parents loaned us part of the money for a down payment on our first house (that we bought with a friend because we couldn't afford it on our own). We assumed an 8% VA loan and scraped together what we could from some money I inherited from a great aunt along with an 18% rate additional loan and the loan from DH's family. They might have considered it a gift but we never did and repaid - no interest charged. There were times when DH's father didn't cash the checks (when I had to quit my job for cancer treatment) but we persevered with full repayment.

IMHO if you have financially responsible children who just can't accumulate what's needed for a first home these days, and you are blessed with the financial means to help, how wonderful that you can do so.

As Trailrunner wrote "the money to the kids is a gift. We would rather they have it now so we can see and participate in the enjoyment."

For all three kids we gave the down payment and then a surprise bonus after settlement to help with all those other expenses. They could have covered it themselves but it would have taken a chunk out of their savings and DH and I wanted to do it. This way they didn't feel stressed about their monthly payments. What I found interesting is that they each selected a house that they could afford on one salary since they were hoping to start families. They wanted to be sure that they didn't have to have a double income in case one parent opted to stay home with the babies. I think it helped that they were all in their mid 30s and had tired of paying rent. We are in our early 70's and have no worries about our future expenses so it has been an absolute joy to help them.

My parents helped me with my first house back when I was 28 in the 90’s. they always sort of said wedding or a house, your choice. So finally I called it in and they agreed after I presented my case.

They also co-signed my loan without the expectation of any ownership because they knew how responsible I’ve always been. I refinanced and took their name off the loan as soon as that option was available to me.

Having their help then got me into the California real estate market at a time when most single women I knew couldn't. I’m forever grateful.

Just know that if you do this there could be hoops to jump through. The kids bank accounts will be audited for any transfers in or out over a certain amount for the previous 3 or 6 months. A gift letter may be needed and you may have to prove that you have the assets to truly make this a gift. This is to prove that you and the kids are not just shuffling $$ to make it appear they have the resources to get a loan.

It's been several years but I think we just gave the kids a large check after closing to replenish wiped out accounts and give them some cash for all those new house expenses. Our attitude is like many others, give it to them now and see them enjoy it.

We have received help and the givers track amounts given, I believe so they can plan inheritances. As well I think they structure it so that it’s a loan with no payments, perhaps to avoid losing big chunks of money should their kid divorce. In Canada, from what I understand, should things get contentious in a divorce, it’s unlikely that an unenforced loan with no payment schedule would be treated differently than a gift when splitting up marital assets. So if you wanted to protect the gift in case of future separation, legal advice needed.

One more thing I thought of - not relevant if you are planning a gift vs. a loan. DFIL also loaned very established BIL (in his 40s or 50s) money to buy a second home. We had no idea this was the case until DFIL died. It only came to light because there was a "formal" written loan agreement. BIL immediately repaid after death and it may have been a mutually beneficial arrangement. However we were shocked to learn that BIL used this means of financing his second home purchase - second home and at that stage of life. We also purchased a second home and never would have dreamed of approaching family to finance it. As time has passed however, it has become more apparent that BIL does take advantage of any family members willing to help him finance discretionary purchases.

We have had three adult children enter the housing market this year. We helped with advise, inspection, advise. Independent offspring are a fabulous thing!!! A straight up gift, no looking back is really the only way to do this and not put your own financial planning in jeopardy. They will be in with all they have and then to have a 'loan' out to you too...well if they could afford THAT they wouldn't need you right? Bottom line if they go belly up early in life like they are they have little to lose. If you are tied to their loan you have much to lose. Truth is banks are back to over loaning for housing, interest rates are in the basement. If yours can't get what they want with the giveaways it doesn't look great they can 'afford' what they want. Which is all things you already know, considered, lived. If you have it to lose do what you want!!

I’m not sure what the legalities are in the U.S. however I would make sure that if I gave money to my children to buy a house, that that house would not be divided 50/50 in a divorce settlement.

My parents helped me buy my first house, a million years ago. But I was an only child, so there was no need to track anything for inheritance equity later on. And since it was a million years ago, I don't remember (?) any issues on using gift money as part of the purchase transaction. Now I do think there may be (?) some rules, or scrutiny, or something as part of the mortgage application process...but it's possible I'm wrong too.

If you have a thick skin, and are truly interested in hearing all the ways this can go sideways - ask the exact same question on the Building a Home forum here. Or, at least search that forum and see the pearls of wisdom in past threads. The challenge is that forum is...let's call it interesting. Ha. You'll likely get people telling you it's the worst idea ever and you may get other people telling you to just give your kids all of your money now. It can be wild there. But there are also some really smart folks who hang out there and if you can stand the poo that sometimes gets thrown around, it's a worthwhile endeavor. If you've got a tender heart, take Jinx with you for backup, because she's my favorite badazz. LOL. (But seriously - I'd suggest searching that forum, because this question comes up there maybe once a year or so and some of the replies have been very worthwhile to consider....)

In our market the issue isn't the kids making the monthly mortgage payments which can be less than rents, it's saving enough for the down payment. That's what many parents are helping with and with our kids and what their income is, they can afford the mortgage payment and pay us back but trying to save for a down payment is really difficult.

But I do agree with patriceny about really being aware of your own financial requirements and having your kids being honest with their income, whatever other debt they may have, and what their spending habits are. Are you lending them money because their spending habits are frivolous or do they want to buy something that is out of their financial reach mortgage wise. Canada also has a financial stress test for home mortgages (I can't remember the actual numbers) but you have to beable to qualify for a mortgage rate that is higher than the going rate.

I have helped relatives buy homes, with gifts.

Starting in 2022, you can give $16,000 per person. Keep in mind you can gift up to 5 years worth in a lump sum, So you can give each person $80,000 this year, or $160,000 total for a couple, and they will not pay any tax on the gift. If you gave them additional monetary gifts in the ensuing 5 years they would incur a gift tax on those additional sums.

I think taking an ownership interest in a property is fraught with issues, and I don't see the point unless one is trying to make an investment rather than a gift. I also think trying to protect against divorce is fraught and ill-advised.

The times we have lent money. I have found the following rules (from my DH) helpful. Give people 20% more than they ask to borrow, allow them 20% longer to repay, and be prepared to accept never getting it back.

"My suggestion is if you can’t give it freely then don’t give it." Every adult child would appreciate this.

The only financial support my parents gave me was my mom's work bonus and a computer so I could attend Air Force Officer School and buy uniforms, etc. I repaid them with my husband's Army Captains' retention bonus. They weren't expecting it, but it was always on my mind. However, our parents supported our military careers, being the post office while deployed or overseas, storing furniture, paying bills when online bill pay wasn't an option, and being POA.

We don't have kids and we've been able to purchase our homes from the beginning of homeownership years 15 years ago. Instead, we gift money to my brother/SIL and nieces for a new HVAC struck by lightning and not covered by insurance (in Arizona during the summer), horse riding/therapy lessons, and recently, karate for the 7yr old. We do it because we want to, not because they need it. We offer and they appreciate it as a gift to the girls, not them. God willing we'll leave them a nice inheritance but why not let them (and us) enjoy it now?

Good to see you back, Mtn.

Thanks all who have recently weighed in. We were leaning toward 0% ownership for ourselves and making it a gift rather than a loan. What I'm reading here supports that. We've always lived below our means and we wouldn't even be contemplating this if we couldn't do it without fretting. Also, she's never asked us for help, so we don't in any way feel burdened by this. I expect it will be a huge surprise to her when we sit down to talk about this.

DD is single, though she is in a long-term relationship, so she would be buying this as a single person. She's a tremendously hard worker and has saved an impressive amount of money, but the median house price in Austin is about $450K now, which is just really tough for one single person to manage. I have thought about the protection of assets down the road in case of a divorce or something, but I guess I would hope that by buying this herself before getting married, she would have some protection. I don't honestly know that, but I don't think taking on some level of ownership ourselves, which might mitigate the risk, is really worth the slight chance of issues there.

Thank you all again-

We have gifted to help with house down payments, remodeling and cars. Never experienced any pitfalls.

If/when DD plans to get married, she should get a prenup. They are not expensive and it will protect her financial investment in the house. She will need to keep a bank account (in her name only, not include DH) to pay house expenses, but he can reimburse her for whatever they agree on to go towards utilities. She has to pay for repairs, remodeling, taxes, insurance - anything that has to do with repairs or upgrades on the house. Both my sister and DD2 have/had prenups and both attorneys said the same thing. DD2 and her husband have children and she has it written so that he gets the house if she dies so they won't get displaced for any reason.

Buying the house herself before the marriage does not protect the asset in the divorce (at least in the states I am familar with).

DD2 bought her first place, a townhouse, at 19yo. My name was on it with her. Then she moved up to a 3BR house a few years later my name was also on it. But when she moved the next time, I removed my name since she was almost 30yo then. She has never had a mortgage.

If/when they move again, and if they have a mortgage, and if her DH is helping to pay, DD2's prenup states her (much larger) portion of the investment is protected in a divorce. Hope that makes sense.

No experience yet, good to hear that this works well for most. We have also planned to help out our children. It has started with my daughter, when she became engaged we told her $X is what we can do, you can use it for a wedding or toward downpayment on a house. They really wanted a small wedding so this worked well. They are now in process of looking for a house, so the majority of the dollars will be a gift to them for the house downpayment. The groom’s parent have also offered them a gift for the downpayment. Real estate is crazy expensive here so between the two families we are making sure a starter home will be affordable for them. We will do the same for my son.

Many of you know that we built a duplex with our DD (only child) and DSIL. We gifted them 1/2 of the puchase price of the lot and paid for the build. Gift tax returns were filed. DSIL put in significant sweat equity and they managed the build before we moved here. Practically and in our minds they ”own” their side and we own our sside, but legally we own half of the whole and they own half of the whole. Especially as a lawyer, I am aware of potential pitfalls, but comfortable with the risk. The benefits far outweigh the risks. The kids have been together almost 20 years, married almost 14 and have a four year old. They are both solidly responsible with good jobs and take pride in ownership. Real estate is crazy expensive here too. i just thought it was expensive when we built, but in the last four years it’s gone crazy more than doubling in this neighborhood and I‘m just glad they get half appreciation, keeping it out of our estates.

@Bestyears Texas is a community property state and your daughter should understand her rights and responsibilities regarding separate property of a home prior to marriage and caveats to adding someone to the deed or title.

Sometimes in marriage the non owning spouse assumes everything is split down the middle particularly in the community property state. Sometimes new spouses get upset when their partner has a property that they do not enjoy in ownership or potential financial gain.

"Texas law recognizes that property acquired before the start of the marriage is the separate property of that spouse. The law also provides protection to property that a spouse may have purchased or received during the marriage if the spouse can prove the property is under his or her sole ownership and management." This might require a her to have a separate account for house payments and maintenance.

My father held the mortgage for my first townhouse. I had enough for the down payment. He charged me the lower end of the interest rate range at the time, maybe a tad lower but in line with the law. After I married and our first child was getting older, we bought a house and rented out the townhouse. When we sold the townhouse, we paid off the mortgage (or maybe we paid it off sooner, I really don’t recall). Now that my father has passed away, I’m sort of getting the mortgage money back.

We did. We began by giving DD and DSIL each the maximum allowable the year they got married to put towards a house purchase. They work in Cambridge and Boston, so anything within an hour commute was getting increasingly untouchable. Fortunately they had a 900 sq. foot condo DSIL purchased a few years earlier which was great when it was just the two, but we were blessed with a grandson during the pandemic. So new baby, small condo and two people now working from home meant time for a move. They really couldn't put the condo on the market until they moved. Once they finally (yay!) found a house in a good suburb we helped by paying for some bigger ticket items that were really needed. The condo is now sold, and they're getting settled in the house. We will do the same for our other two kids when/if the time comes. Worth every cent for my peace of mind, especially as a new grandmother. I'd much rather use our money now to help them build their own financial security.

My parents bought each of us kids our lot, and my dad, being a home builder (now retired)-built each of our homes, free of charge, of course. We were responsible for the rest. He knew we would move and make money on each sale and that is what we all did. It worked out well for all of us, and we plan on doing that for our son.