helping them buy a home

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:DH and I want to help DS to purchase his first townhouse, around 1M, but we want DS to have skin in the game. DS has lived at home with us for three years and saved up 95% of his annual salary, after taxes, for the past three years with about 240K in his account. When he officially moved out two months ago, we gave him 600K for his 1M home purchase down payment. IMHO, that is the right approach.

That's the right approach? Giving him 600K?? You call that having skin in the game? LOL.

The kid lived at home for 3 years post college and saved 95% of his salary---so he lived fairly frugally. That is skin in the game. It shows he's committed to not just blowing all his money on luxury items. He has 240K in savings/emergency fund. Now that he knows he wants to stay in the area (likes his job, etc) he wants to settle down. What parent would not help a responsible kid if they have that much money?

I get it---you are jealous that you can't do that or didn't have that happen. But it doesn't mean the kid does not have "skin in the game"

So, the kid makes around $110k/yr with $400k mortgage and $3000 PITI? $600k gift is the only way he can afford a $1 mil house.
$3000 PITI is pretty tight for $110k salary.

Any parent that is giving 600K for a downpayment would likely also be helping them out otherwise as needed.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:DH and I want to help DS to purchase his first townhouse, around 1M, but we want DS to have skin in the game. DS has lived at home with us for three years and saved up 95% of his annual salary, after taxes, for the past three years with about 240K in his account. When he officially moved out two months ago, we gave him 600K for his 1M home purchase down payment. IMHO, that is the right approach.

That's the right approach? Giving him 600K?? You call that having skin in the game? LOL.

The kid lived at home for 3 years post college and saved 95% of his salary---so he lived fairly frugally. That is skin in the game. It shows he's committed to not just blowing all his money on luxury items. He has 240K in savings/emergency fund. Now that he knows he wants to stay in the area (likes his job, etc) he wants to settle down. What parent would not help a responsible kid if they have that much money?

I get it---you are jealous that you can't do that or didn't have that happen. But it doesn't mean the kid does not have "skin in the game"

So, the kid makes around $110k/yr with $400k mortgage and $3000 PITI? $600k gift is the only way he can afford a $1 mil house.
$3000 PITI is pretty tight for $110k salary.

How did you come up with 110k/yr salary?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:DH and I want to help DS to purchase his first townhouse, around 1M, but we want DS to have skin in the game. DS has lived at home with us for three years and saved up 95% of his annual salary, after taxes, for the past three years with about 240K in his account. When he officially moved out two months ago, we gave him 600K for his 1M home purchase down payment. IMHO, that is the right approach.

That's the right approach? Giving him 600K?? You call that having skin in the game? LOL.

The kid lived at home for 3 years post college and saved 95% of his salary---so he lived fairly frugally. That is skin in the game. It shows he's committed to not just blowing all his money on luxury items. He has 240K in savings/emergency fund. Now that he knows he wants to stay in the area (likes his job, etc) he wants to settle down. What parent would not help a responsible kid if they have that much money?

I get it---you are jealous that you can't do that or didn't have that happen. But it doesn't mean the kid does not have "skin in the game"

So, the kid makes around $110k/yr with $400k mortgage and $3000 PITI? $600k gift is the only way he can afford a $1 mil house.
$3000 PITI is pretty tight for $110k salary.

How did you come up with 110k/yr salary?

Not PP, but if you assume 110k salary and 22% in taxes, then you get 85K/year. Take away 5% saved you are at 81K so lets say 80K and that is the savings for 3 years to get to 240K saved.
So I suspect it's an estimated calculation at what the kid is making before taxes to have spent 5% of income and saved the rest for 3 years.

[Anonymous]

I had lots of friends whose parents helped them buy. I didn't get that. Bought my first home at 32 after saving for 6 years (I went to grad school so made nothing for a long time). There is also nothing wrong with buying later in life.

When my kids are older I'll only help if they plan on starting a family and not wasting money on frivolous things.

[Anonymous]

Do what you want, just don't attach strings.

[Anonymous]

My parents gave us 70k to put down and it helped immensely. We saved so much money in the long run by not continuing to rent in an increasingly expensive city and were able to buy right before home prices in our area started soaring. It set us up to save more money and start a family earlier. We plan to help our kids in the same way.

[Anonymous]

We are also helping our son buy a house because we can afford to do so and want him to live in a better neighborhood than he can afford on his own. Our situation is similar to the OP giving their child $600K to buy a house for $1M. In some neighborhoods in the DMV $1M only buys a small old house that needs work or a standard townhouse. (So no, I do not believe OP is a troll.)
My question, how have people titled ownership for these house purchases (Titled in the child’s name, child and parent’s name, in a trust, etc.)? Does it make a different if the adult child is currently not married?

[Anonymous]

Anonymous wrote:If home ownership and real estate as investment is valuable to you and you want to share that with your children, absolutely HELP THEM.

This is the type of family I was raised in, and my parents and grandparents each gave me a substantial amount of money as a college graduation gift that was dedicated for a down payment. I did not purchase my first home until I was out of grad school, but having that money available + an FDA loan allowed me to buy a house in an appreciating neighborhood even though interest rates were high. I am on my third home now and have been able to move up into a great neighborhood with excellent schools and a reasonable commute because of the equity made possible by that first downpayment gift.

But you will never reach adulthood.

[Anonymous]

Anonymous wrote:People didn’t usually pull themselves up as much as they claim, and it’s often a cover for being unable to help their own kids. So it’s a lie in both directions.

My parents helped with my second house so we could buy before selling to avoid the pressure of a pending deadline. I will always be grateful and I still have my work ethic and job.

Actually, I think this is the deception. People here have some kind of skewed view about "generational wealth." The VAST majority of people in the United States didn't go to college, didn't have help buying a house, and don't have grandparents paying for private schools.

Be grateful for what you got, but don't dismiss the efforts of many people who have worked hard and saved.

[Anonymous]

Anonymous wrote:

Anonymous wrote:DH and I want to help DS to purchase his first townhouse, around 1M, but we want DS to have skin in the game. DS has lived at home with us for three years and saved up 95% of his annual salary, after taxes, for the past three years with about 240K in his account. When he officially moved out two months ago, we gave him 600K for his 1M home purchase down payment. IMHO, that is the right approach.

That's one tiny "skin".

Rich/UMC parents often help their kids. If it's not a burden to the parents, I just don't understand why people have an issue with it, beyond jealousy. If you have the money you help your kids get a start in life, especially if they are being responsible adults (and living at home and saving virtually all of your income at a great job is how I'd define responsibility).

[Anonymous]

Anonymous wrote:As a teen my grandmother gave me $10k and said it was not to be spent on anything other than a down payment. I put it in a CD and by the time I was ready to use it it had doubled to $20k which we used. To this day my mother throws it in my husband's face that "you wouldn't have this house without our family money." So if you give this gift be sure to give it without strings attached and don't annoy the future spouse about it.

Well that is a given. We don't give $$$ to our kids with strings attached, other than they need to keep a job and be a contributing member to society (no working only 20 hours per week so they can sit at home and play video games or recover from nights of partying---not happening on our dime). So as long as they are adulting we will help.

[Anonymous]

Anonymous wrote:My parents gave us 70k to put down and it helped immensely. We saved so much money in the long run by not continuing to rent in an increasingly expensive city and were able to buy right before home prices in our area started soaring. It set us up to save more money and start a family earlier. We plan to help our kids in the same way.

THIS^^
Our parents did not help, but when we bought our first house, we did so right after we had finished paying off student loans and had saved the 10% downpayment. Even with PMI and assuming 4-5% maintenance costs per year, our monthly payments/costs were slightly less than our average apartment (not luxury, not grad school level either, just a nicer/decent/safe place). So we jumped in because building equity was more important. But it would have been nice to not pay PMI and have the extra 10% given to us.

[Anonymous]

Anonymous wrote:We are also helping our son buy a house because we can afford to do so and want him to live in a better neighborhood than he can afford on his own. Our situation is similar to the OP giving their child $600K to buy a house for $1M. In some neighborhoods in the DMV $1M only buys a small old house that needs work or a standard townhouse. (So no, I do not believe OP is a troll.)
My question, how have people titled ownership for these house purchases (Titled in the child’s name, child and parent’s name, in a trust, etc.)? Does it make a different if the adult child is currently not married?

We plan to just gift the $$ to our kid, and/or give it to them over years with the max gift allowed tax free yearly ($17K per person to a person, so we can gift our kid $34K and our kid's spouse $34K per year). I don't want the home titled in my name, these are gifts to our kids. And at our Net worth, I don't want to be liable if someone decides to sue to get rich.

[Anonymous]

At what age do you stop wiping their nose and their butt? And when they experience a rough day at work, do you march into their office and yell at their boss?

[Anonymous]

DC is more apartment or maybe townhouse type. Not only will I have money for DC, but hoping to look after of all DC's finances and investments. I like it, DC don't.
House is the smallest problem. Managing all the money long term is the cool and exciting part.