Parents

Do homebuyers expect help from Mom or Dad?

Do homebuyers expect help from Mom or Dad?

Is it fair to call the millennial generation one of the least independent generations we have had? We may get some pushback for suggesting that, but speaking strictly about housing arrangement, that categorization is not exactly inaccurate.

Demographic and living arrangement research from the Pew Center suggests the incidents of young adults 18-34 living at home with parents are the highest in 130 years (!). There are also recent evidence that when young adults leave home to set up their own nest, they often do so with the financial help of mom and dad.  

In a latest Q4 2018 survey by ValueInsured, millennial homebuyers who plan to buy a home “in the near future” were asked if they expect financial help from their parents and/or their in-laws to fund the down payment, typically the largest financial prerequisite and barrier to owning a home. Overall, 56% of all millennial expectant buyers reported they do not expect financial help, while over 4 in 10 millennial buyers (44%) said they do.  

USA TODAY - Should you help your adult child with a down payment for a house?

USA TODAY - Should you help your adult child with a down payment for a house?

More than one-third of Millennials looking to purchase their first home say they plan to rely on a loan or a gift from a relative to cover a key portion of their down payment, according to a recent survey.

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Asking family for down payment help? Join the club!

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Asking family for down payment help? Join the club!

Millennials are living at home longer to avoid paying high rent or to save for their own down payment. This is not news. Millennials are even asking their parents to refinance their own home in order to help with all-cash offers to win bidding wars. You may have already heard about this one also.

But did you know that Millennials are hardly alone, at least when it comes to receiving home-buying assistance from family. In ValueInsured’s latest Modern Homebuyer Survey, it is reported that nearly 1 in 4 interested homebuyers plan to seek down payment help from a family member. What’s more interesting is that the pattern is near universal, across demographic segments.

Can homebuyers today actually afford the homes they buy?

Can homebuyers today actually afford the homes they buy?

Last week, ATTOM data Solutions, curator of the nation’s largest multi-sourced property database, reported that nearly 1 in 4 (22.8%) of all purchase loan originations in our country now require a co-borrower(s)’ credit to afford the loan approved. Co-borrowers are multiple, non-married borrowers listed on the mortgage. In some of the nation’s top real estate markets – which are coincidentally some of the most expensive with rapidly rising home prices – co-borrower rates are eye-popping: half of all new home loans in San Jose now needs a co-borrower’s credit to satisfy the loan requirement (51%), nearly half in Miami (45%), 39% in Seattle, 31% in Los Angeles and 29% in San Diego.

It begs the question: can these new homebuyers actually afford the homes they buy?

How can first-time homebuyers afford to buy in this heated market? Ask your parents.

How can first-time homebuyers afford to buy in this heated market? Ask your parents.

This may be what the gold rush felt like, except it is now a rush to buy homes. We keep hearing housing demand is high, inventory is tight. Some headlines even describe homebuyers as "panicking" to rush to buy homes, or rushing to lock in low rates. Yes, if you have been paying attention to recent reports, you may have seen the word “rush” used frequently when describing today’s home buying activities.

However, while many first-time home buying hopefuls wonder how they can save enough to buy at today’s sky-high prices, some may at the same time notice their own parents are selling. Baby Boomers are downsizing, and many are making bank.  And they can help...

New York Times - Advice on Lending to Adult Children

New York Times - Advice on Lending to Adult Children

Parents often come to the rescue when their adult children need help putting together enough cash for a down payment. Whether they offer financial assistance as a gift or with the expectation of repayment, parents acting from the heart might want to consider a more businesslike approach.

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Advice on Lending to Adult Children

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Advice on Lending to Adult Children

Lisa Prevost (New York Times) writes about things parents should be aware of when lending money to their children to purchase a home.  Her simple points can help make buying a home as happy as it should be for both parents and children.  We created +Plus down payment protection to make it even better.  Only +Plus goes a step beyond protecting the title and the bank loans, to protect the homebuyer's down payment against uncontrollable market loss.  it was made for situations like this where parents want to help their children achieve the dream they did and their parents did before them.  It was also made for these modern homebuyers who require flexibility and control of their home - not the other way around.  If they want to move, they can and not be stuck in a negative financial situation for them or their parents.

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