Buying a first home - did you get the downpayment from your family?

[Anonymous]

My parents paid for my closing costs. This was 30 years ago. They gave a couple thousand dollars. I was very grateful. It is a hardship for many parents today to offer money to help their children buy a house, as many have just finished shelling out for college tuition. If they keep giving all of their money to their children, how will they have enough for retirement and end of life expenses? Then of course the children expect inheritances.

[Anonymous]

I sure don't expect an inheritance. Would be nice but I think my parents will have spent every dollar (correctly) on their own care by the time they die.

What no one has mentioned yet is that of us older types reading this are the "sandwich generation". We are taking care of parents on both sides (3 still alive); we had kids late in life so we have middle-school and high school tuition payments (yes, shifting to public) plus some of us are just now starting into the college expense years; we should be retiring soon but can't afford to do so, and notwithstanding the fact that I had this figured out 25 years ago and saved, saved, saved, and set up college trust funds for my kids (pre 529s), no one saw the 2006 market collapse coming. Losing 1/3 of your portfolio overnight across the board is very hard. We also had extensive hospital bills spanning a decade for one of the grandparents. And brothers and sisters who lost jobs. It's pretty grim for some of us.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not a single one of our friends, even those the closest to us know our second house was gift from my parents. It's a very modest house just outside the beltway, so nothing extravagant. Something we would have bought on our own if we hadn't been horribly upside down on our first house in the outer burbs. My parents gifted each of us kids the same amount. Basically we got our inheritance early.
Why on earth would we share this info with anyone? I really don't understand why people share that info with their friends.

I have some friends who are an open book. They know my salary exactly, they know my networth, etc. I know theirs. Each year we compete for who can have the greatest net worth increase in % terms. He with the largest increase takes everyone out for dinner. It's silly, but fun, and frankly a decent way to motivate each other to save - while also comparing how we do. One guy has blown past us with his $600K a year no kids income - so we are thinking we need to adjust the formula a bit, but its cool.

I find this very strange. It's like sharing detailed information about your sex life with your friends.

[Anonymous]

My close friends know much more about my sex life than my finances

[Anonymous]

OP here:

Thank you all for the honest discussion. It's a pretty charged topic, so that's why I thought the anonymity of DCUM would be perfect for it.

This is definitely one of the better threads I've read on these forums. And yes, it sounds like a lot of people have mooching siblings (like my brother).

[Anonymous]

No, no and no! My spouse and I started out our professional lives in DC with student loan debt almost three times our annual income.

Our parents did not give us money for our first car (a Pontiac Sunfire) or our first house ($300K in Alexandria). We now live in a $4 million house, drive nice cars, and send our children to private schools.

You can and should make do without your parent's help. Please let your parents enjoy the fruits of their many years of work without having to worry about supporting you as well (unless they want to, then fine).

[Anonymous]

Well, if parents live in a high cost of living place like Bethesda, they cannot complain if the young couple is priced out and lives further out, with the likelihood that grandkids are raised further out.
Parental gifts come with strings attached. Just because MIL paid part of deposit, does not mean in laws decide where you purchase, or how often they can come and visit unannounced.
Difficult to find the right balance, but fortunately for us it never was an issue.
No money from family.

[Anonymous]

Anonymous wrote:My close friends know much more about my sex life than my finances

Eeuuw. I don't want to know about anyone's sex life.

[Anonymous]

Anonymous wrote:

I grew up around here, always worked or interned in the summers. After college, I lived at home for about 9 months while paying rent to my parents and paying all my bills on my own. I was working on the Hill. For those 9 months, I saved up a small emergency fund and waited to find the right rental group house. I stayed in that group house, while still working on the Hill, still paying all my own bills (didn't even have a family cell phone plan) for about 3.5 years.

Then my parents loaned me $100K for my down payment (with interest) to buy my first house. That was their offer, and I never expected it in a million years as they have always been on the self-sufficiency side of the spectrum. At the time I bought, I was making 40K and I had two roommates join me in the house. Lived there with roommates for 11 years.

worked out for you nicely
It was the "paying rent to parents" that gave me the jump I needed to move out. I realized that with what I was paying I could live on my own, so I rented a room. They were very angry with me, but I moved out anyway. I was not even allowed to take my bedroom furniture.
I did not let that stop me. So I stayed in the rented room with a mattress on the floor.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

I grew up around here, always worked or interned in the summers. After college, I lived at home for about 9 months while paying rent to my parents and paying all my bills on my own. I was working on the Hill. For those 9 months, I saved up a small emergency fund and waited to find the right rental group house. I stayed in that group house, while still working on the Hill, still paying all my own bills (didn't even have a family cell phone plan) for about 3.5 years.

Then my parents loaned me $100K for my down payment (with interest) to buy my first house. That was their offer, and I never expected it in a million years as they have always been on the self-sufficiency side of the spectrum. At the time I bought, I was making 40K and I had two roommates join me in the house. Lived there with roommates for 11 years.

worked out for you nicely
It was the "paying rent to parents" that gave me the jump I needed to move out. I realized that with what I was paying I could live on my own, so I rented a room. They were very angry with me, but I moved out anyway. I was not even allowed to take my bedroom furniture.
I did not let that stop me. So I stayed in the rented room with a mattress on the floor.

I know some parents that made their kids pay 'rent' and then when they bought their first house, they gave them the money as a furnish your house present. I thought it was an interesting way to do it since you were saving the money without realizing it and didn't feel entitled to the money.

[Anonymous]

Anonymous wrote:Officially $0. However, my parents put money in an investment account for me when I was born. For 26 years the stock paid dividends and was reinvested. Occassionally they added to the investment account for holidays and my birthday. I cashed it out for my downpayment. It was worth about $50K.

Me too! My total was around $20k, enough for 20% down and closing. So grateful for this.

[Anonymous]

How do you handle the legal side? If wife wants in on the deal, but is not a high earner, will a divoce mean the money is joint? Or are the parents name on the title?

[Anonymous]

We did not receive a single cent from family. I was 22, Dh was 28 when we started the buying process, but I had turned 23 by the time we actually closed. That was nearly 15 years ago, in the San Diego area.

[Anonymous]

Why pay rent to parents when for the same money you could be living on your own and experiencing independent living

[Anonymous]

My mom covered our closing costs and helped us pay for some repairs. The downpayment came from our savings. We had 20% in 1998. Then we sold the house 6 yrs later and made a large profit and used part of the money to help my mom get into a condo.