Escalating home prices often cause many first-time buyers to seek help from their families for the down payment on a new home. If your parents are providing financial assistance for the purchase of a home, it is important that you have very clear agreements with them about the conditions under which their help will be provided.
Sit down with your parents to discuss the details of the arrangement. Is the money they are providing a gift or a loan? If it is a gift, be sure to check with your tax expert to minimize the tax implications. If your parents are loaning the money for the down payment, how will it be paid back? Will there be joint ownership with an equity-sharing agreement? Will your parents be named on the ownership papers with you? Are special documents needed? Whatever form it takes, parents who help their children buy a home give them an incredible gift!
Our market, here in College Station, provides a number of opportunities for parents to assist their student with housing. The local market is feeling some of the affects of the national market, but is still strong. With the interest rates dropping, parents could make a good deal on a purchase for their student. Low financing interest rates could make buying a house, condo, or townhome cheaper than renting and provide a possible cash profit each month if your student has roommates.