should parents help their kids with d/p on a house?

[sctsbride09]

Oops. Sorry about that, I THOUGHT my eyes were tricking me! Wouldnt it be great if it WAS that cheap though? That way more of us could own instead of renting. Aarg I hate the prices here in so cal..Sorry about the thread jack.

 

[ForteKitty]

haha it's okay. I've accepted it tho. It's the price we pay for beautiful weather. I'm in a t shirt and flip flops today, and was at the beach last weekend!

 

[Haven]

From a person who is starting the process of looking for a house, no. Kids have to become independent,and that means financially as well. If I (and my SO) cannot afford the house on our own, we shouldn't be buying it. Plus, I've lived at home, worked since I graduated college and now have a nice down payment saved up. I do pay all my expenses, just do not have rent.

On the flip side, my parents did put down about half the money for my brothers house, plus paid for complete renovation, with my brother and father doing all the interior work themselves. For that, my brother now has my father's name on the deed to his house. Not sure if my parents will forgive the money when he sells (it was over 6 figures) but I wouldn't want that uncertainty.

As my SO says, he wants the house to be ours, not ours and my parents.

This is where this discussion gets interesting--how people define "independent" and just when, exactly, they believe that independence should happen.

It sounds like you live with your parents as an adult. I imagine there are people who believe adult children who live with their parents are not yet independent, or that it is something parents shouldn't allow their children to do as adults.

What I find interesting is that your arrangement of living with your parents has probably contributed to your ability to pay for your home on your own. So, is there a difference between someone who lives with her parents for a few years as an adult and then uses the money she saves for a DP vs. someone who does not live with her parents as an adult and accepts some money from them as a contribution toward her DP? Is one more independent than the other? I don't really see much of a difference.

(By the way: I'm not trying to argue with you, Court, I think your post brings up some really interesting considerations for this discussion.)

I, myself, lived with my parents after college so I could save up to buy my own place. That's what we do in my family. I think this is largely a cultural thing. My family has only been in the USA for two generations, and we view family differently than many people who have been here for a long time. It's the same way with my Greek friends, they all lived at home until they were married; it wasn't a matter of being independent or not, it's just the way the family works. We stay close to home, too, even after we're married.

As for the original question, I think parents should do what they believe is in the best interest of their children. In this case, it depends on the parents' financial situation, on the children, and how this gift may or may not affect the children and their financial situation. When we have adult children, I hope to be in a position to give them a gift of money towards a DP on their first home.

 

[suchende]

Independence and rugged individualism are American fictions no one is truly "self-made."

 

[Blackpaw]

Well said, Suchende, id agree. And that's why the vast majority of people remain in the same socio-economic sphere as their parents i guess. I *think* if i had kids id hope to give them the tools (education etc), and the 'help' if i could afford it, to do better than ive done...but i prefer dogs anyhow

And Haven raises a valid point too, 'help' comes in a variety of guises....

 

[Jennifer W]

If they want to, otherwise no. Why do you ask?

well,i was thinking that housing is near bottom so maybe we should help our daughter to buy a house within the next 18 months.she been putting the max into her Roth IRA,but i don't want her to take money out of her Roth b/c she can't re-deposit the money in the future. Lunch time

I hope your daughter appreciates you.

ETA I would be pleased to help my own daughter if I was in a position to do so and she was able to meet all the other expenses. She's only two though, so I'm not going to have to put my money where my mouth is quite yet!

 

[TravelingGal]

If they want to, otherwise no. Why do you ask?

well,i was thinking that housing is near bottom so maybe we should help our daughter to buy a house within the next 18 months.she been putting the max into her Roth IRA,but i don't want her to take money out of her Roth b/c she can't re-deposit the money in the future. Lunch time

Hold on to that money DF. It's not at bottom IMHO here in California.

 

[CUSO]

I am not understanding how some people think. It would bring me so much joy to be able to give my kids $ (as long as they were responsible) for whatever, including a house or car. I worked hard, my wife works hard so we can do these things, but like I said earlier, we knew we wanted to be able to provide these things to our kids, so we chose our carreers carefully so we could do this. When we 1st married, her parents would give us 10k every year. They are not wealthy, maybe $75k per year income, so at 1st I was hesitant to accept. But then I realized how much happiness and joy it gave them to give it to us. To this day we make considerably more $ than them but they still give us thousands every year, again, because it makes them happy to give it. I look foreward to the day I can do it with my kids. Espacially a down paymeny for a house.

 

[ksinger]

Independence and rugged individualism are American fictions no one is truly "self-made."

Oh, they aren't TOTAL fictions, but they are extremely exaggerated, it's true. Social mobility in the US is far FAR less than the pleasant fiction we tell ourselves about it.

(For anyone interested: http://www.americanprogress.org/issues/2006/04/b1579981.html

And somewhere at home, the hubs did some research pertaining to the top 15 or so richest men in the US. Only 2 of them, (as I recall) would classify as self-made men. The rest were recipients of large inheritances - trust funds and the like - from already extremely wealthy parents. So yeah, they buy their own houses....with inherited millions. I'm not terribly impressed with this. And somehow I don't think they're adhering to the same mores as us pull-yourself-up-by-your-own-bootstraps middle-class plebs, but I digress...)

To the topic at hand, my first inclination would be not (being a middle class pleb), not being convinced that home ownership is the best route for every person, among many other things, but there are no hard, fast rules for this scenario. Case by case then, depending on many factors. I had help from my mom at times, (NOT a house downpayment), and was given money for various special occasions - like her absolutely insisting that I not finance a new heat/air system. I didn't refuse in order to be "independent". I accepted gratefully, and paid her back over time. If my mom gave anybody money, it was because SHE truly wanted to and not because you asked for it. I never asked for it, believe me.

Only the parent knows. But is there an obligation to? No way.

 

[sba771]

I say no, but I am also weird. My FI's parents offered us a decent amount of money and they said use it for the wedding or the house. My FI and I already were planning on putting 40% down for our new home so the money, while super helpful, wouldn't have made or broken us. I told my FI point blank the money had to go towards the wedding. My feeling is I don't want anyone else outside of us as a couple to have any kind of stake or claim to my home no matter how small or large. It has to be ours and ours alone as I don't ever want it used against us.

 

[Autumnovember]

If they want to, sure. If my parents offered, I wouldn't accept. I just feel like thats my own responsibility completely and I can't imagine using my parents money for something like that.

 

[NewEnglandLady]

If they want to, sure. If my parents offered, I wouldn't accept. I just feel like thats my own responsibility completely and I can't imagine using my parents money for something like that.

This is exactly how I feel. I see absolutely nothing wrong with it, I just wouldn't accept it. My parents would honestly do anything to help me, however what would make me most happy is if they spent every dime of their money on themselves.

 

[davi_el_mejor]

I wish my parents had enough disposable cash to help with a DP on a house. That would make me much happier than them helping with the DP.

 

[ForteKitty]

For those who wouldn't accept, would it make a difference if it was an interest-free loan from your parents, to be paid back in a few years?

 

[Pandora II]

My parents have always felt that all 4 of their kids should be buying their own cars and houses - however my father inists on it being his duty to pay for weddings for his 3 daughters. That said he gave my brother the same amount of ££ that he spent on our weddings for his downpayment on his house.

I have a feeling that my father is rather old-fashioned and expects a man to take care of his 'little girl' and so paying for houses hasn't really come up. DH already owned a property when we met and since then we have jointly bought a second, my next-down sister's husband already owned a property when they married and sister no.3 is moving back in with my parents as she is having a very unexpected baby next week!

My husband's family is very different. He is one of 4 boys and his parents are divorced and remarried. His father helped out with the deposit on DH's first property and also helped all the others out in similar ways. He and MIL are very generous - partly I think some element of guilt and mainly because that is what they like to do. There are never any strings attached.

Both DH's and my father are doctors and have very similar income levels, they just make different decisions about how to spend their money.

We will pay for our daughter's college, wedding and towards her first property if we are in a financial position to do so.

 

[CUSO]

For those who wouldn't accept, would it make a difference if it was an interest-free loan from your parents, to be paid back in a few years?

I think that creates more problems that a gift. I never loan money to family. I give it if they really need it and never expect it in return. Loans + Family = Problems. They rarely work

 

[Kaleigh]

No easy answer, every family is different.

I was blessed that my grandparents gave me their house when they were on their way out. I rented it for a few years, and then sold it. I gave half of the money to my kids, so that when the time comes they will have a DP for their first house.

How someone could say this is just wrong?? How can you say that when you don't know the persons involved. Making blanket statements is wrong... It's not black or white...

I was talking to DD today about her paying for a new car, she was in an accident. ( New as in new to her, but will buy used. )

She's in the finance business, and will review her options about paying for it. She mentioned I hate to use the money you gave us, as that's for the first house. I said, well today they say unless you are going to live in that house forever, you don't want to put a lot down on it....


But that's a whole other thing...

I don't think parents should have to do this...

But am of the nature I can, so I will. And I realize I am very lucky to be able to do so.

 

[onedrop]

Fortekitty: I would not accept a down payment on a home from my parents, even under the terms you described. I have always felt like buying a home was something I needed to do on my own and if I could not afford the DP on my own, then it was not the right time for me to buy.

Edited to say that when I say that I would not accept a house DP from my parents, I am making no judgments about what others may do...to each his/her own.

 

[Autumnovember]

For those who wouldn't accept, would it make a difference if it was an interest-free loan from your parents, to be paid back in a few years?

I wouldn't take it anyway. I'd wait until I was fully able to pay for the down payment on my own with FI. I think having a loan lingering above my head would be even worse.

 

[CUSO]

Some people are just backwards. If it brought your parents more joy to give you $ towards a home than anything else, you are being selfish not to accept. I mean when they die you will get their money anyway (unless you want to persue a happy life completely on your own merrit, as many of you have said in your posts). Think about this, when they die you get their money, did they see you enjoy it, did they see you smile at being able to afford something you may not have before? I think it is more rewarding to see my kids enjoy the money while I am still here.

 

[Autumnovember]

If they want to, sure. If my parents offered, I wouldn't accept. I just feel like thats my own responsibility completely and I can't imagine using my parents money for something like that.

what would make me most happy is if they spent every dime of their money on themselves.

I couldn't agree more. I actually look forward to being able to spend money on my parents and give them money every now and then because it would make me really happy to spoil them after all the things they've done for me growing up.

Nothing wrong with giving kids money on a DP, definitely not black and white kind of thing.

 

[ForteKitty]

For those who wouldn't accept, would it make a difference if it was an interest-free loan from your parents, to be paid back in a few years?

I wouldn't take it anyway. I'd wait until I was fully able to pay for the down payment on my own with FI. I think having a loan lingering above my head would be even worse.

I guess i was thinking about my friends, whose parents helped them out w/ about 20%, and they contributed another 20-30%. That way they only had to take out 50% of the house, and take a 15 yr loan. It's not that they couldn't afford it.. the parents wanted to help out so they wouldn't have to take out a 30 yr loan.

 

[ksinger]

Some people are just backwards. If it brought your parents more joy to give you $ towards a home than anything else, you are being selfish not to accept. I mean when they die you will get their money anyway (unless you want to persue a happy life completely on your own merrit, as many of you have said in your posts). Think about this, when they die you get their money, did they see you enjoy it, did they see you smile at being able to afford something you may not have before? I think it is more rewarding to see my kids enjoy the money while I am still here.

Exactly why I accepted when my mother graciously offered financial help with my AC. It made me a bit uncomfortable, but I know she was so totally proud to be able to do it at all. It would have been an ungrateful slap in her face NOT to accept, in my case.

Yes, to equate this sort of thing to a black/white, right/WRONG and put some damning moral judgement on it, is silly. How and when people dispose of their money is not my place to judge. Maybe your kids will turn into feckless spendthrifts if you gift them money, while somebody else's kid will not. I doubt seriously that they will be morally RUINED or less independent by accepting a freely offered gift. If they're going to be morally ruined and made unhealthily dependent by a parent's actions, it will have been decades before they buy a house.

If you feel your kids are worthy of it and you want to help them before you die, do it, if not, don't. It is your money to gift, and theirs to accept or refuse. No moral judgements required.

 

[Italiahaircolor]

My parents helped me with my first home. I was working in the city and commuting every day, which they hated. They wanted me to move out there but rent was around $1,700 per month--so it was a better deal to buy. I graduated cosmetology school and started working at the height of the market and was able to get a pre-construction rate on a condo which at time and for the location was a steal. My parents gifted the property to me because I didn't go to college--so essentially, my unused college fund paid for my condo. Will they do the same for my college educated sister who drained her account? I don't know.

I think it's really dependent on the parents and what they can afford.

 

[Autumnovember]

Some people are just backwards. If it brought your parents more joy to give you $ towards a home than anything else, you are being selfish not to accept.

I think thats a little bit rude to say. Not everyone is going to agree on things like this but it doesn't make anyone selfish or backwards because of it.

 

[CUSO]

My parents helped me with my first home. I was working in the city and commuting every day, which they hated. They wanted me to move out there but rent was around $1,700 per month--so it was a better deal to buy. I graduated cosmetology school and started working at the height of the market and was able to get a pre-construction rate on a condo which at time and for the location was a steal. My parents gifted the property to me because I didn't go to college--so essentially, my unused college fund paid for my condo. Will they do the same for my college educated sister who drained her account? I don't know.

I think it's really dependent on the parents and what they can afford.

I suspect there are very few things parents will do with their money that bring more joy and happiness than helping their children pay for school or a house!

 

[CUSO]

Some people are just backwards. If it brought your parents more joy to give you $ towards a home than anything else, you are being selfish not to accept.

I think thats a little bit rude to say. Not everyone is going to agree on things like this but it doesn't make anyone selfish or backwards because of it.

I noticed you did not quote the remainder of my post.. So this is what I reffered to:

It is selfish, in my opinion, if you will take your parents money when they die, but refuse them the joy of giving it to you before they die so they can see you enjoy it.

 

[Yimmers]

To answer the question, only if they want to.

We actually were looking to do a FHA loan to buy a house. We live in the Bay Area, and frankly, while we can afford the mortgage, dp on a house is at least $100k and up. It would take us years on our own to save up a DP. Even DH's parents said they never thought we'd be able to buy a house (in a decent neighborhood). My parents absolutely did not want us to take a FHA loan, so they helped us with our DP. They actually gave us enough to cover it, but since we already contributed a third of our own money, we opted to keep the rest and invest for future use - repairs, etc. However, I am an only kid, and my parents have two homes - one paid off, and one with little mortgage left (which is beneficial for tax deduction purposes). They also live in a different state where if we were making our current income, would in fact be able to buy a new home on our own. In addition, the money they gave us was my pre-inheritance.

Yes, I do enjoy living where I live, but the cost of housing is just insane. We don't even own a brand new home, it was built in the 50s and underwent some remodeling. And will need some remodeling by us. But, it's great neighborhood, and we're happy.

DH's family has a different philosophy. If we asked, they would likely provide us the money, but in the form of a loan. They may also expect interest as well. Frankly though, it's their money and they can do what they want with it. My mom has a hard time understanding their philosophy, since she believes she should do everything to help out her kid.

 

[Autumnovember]

Some people are just backwards. If it brought your parents more joy to give you $ towards a home than anything else, you are being selfish not to accept.

I think thats a little bit rude to say. Not everyone is going to agree on things like this but it doesn't make anyone selfish or backwards because of it.

I noticed you did not quote the remainder of my post.. So this is what I reffered to:

It is selfish, in my opinion, if you will take your parents money when they die, but refuse them the joy of giving it to you before they die so they can see you enjoy it.

I didn't agree with any part of it and I quoted what stood out to me. A will is a different topic entirely, and I'm still standing by the fact that people who do not accept the money from their parents for a DP aren't selfish or backwards like you're stating.

 

[Autumnovember]

Some people are just backwards. If it brought your parents more joy to give you $ towards a home than anything else, you are being selfish not to accept.

I think thats a little bit rude to say. Not everyone is going to agree on things like this but it doesn't make anyone selfish or backwards because of it.

I noticed you did not quote the remainder of my post.. So this is what I reffered to:

It is selfish, in my opinion, if you will take your parents money when they die, but refuse them the joy of giving it to you before they die so they can see you enjoy it.

I didn't agree with any part of it and I quoted what stood out to me. A will is a different topic entirely, and I'm still standing by the fact that people who do not accept the money from their parents for a DP aren't selfish or backwards like you're stating.