How many people in your social group had family support in buying a house?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not sure but it's much higher than I thought at the time.

When we were trying to buy a house, we felt like crap constantly because everyone we knew didn't seem to have any problems. They all just kind of magically wound up with a house after a few months of looking. Some put in a couple offers and were beat out, but eventually got one a few weeks later.

For us it was just a comedy of errors. So hard to find something in budget, then had to stretch our budget by moving to 10% down instead of 20%, then constantly beat out by higher or better offers, and constantly having to reassess our ask list. We got tons of advice from people about how high to reach or what to look for in closing terms, etc. It was stressful and at the time I thought "wow, our friends are all so much more financially savvy than we are." I felt like an idiot.

Then over the years people have quietly disclosed to me the amount of money they got to help with home purchases and it's jaw dropping. I thought maybe some people were getting an extra 5k or 10k to help with closing costs. Nope. People were getting 50k, 60k, sometimes more. I don't even know how the money worked because I thought there were rules about how much of your down payment could be a gift (and then gift tax rules). In a couple cases it was money identified as inheritance from a grandparent, but the grandparent had died years previously? I have no idea.

Anyway, I retrospectively felt better about spending 3 years struggling to buy and winding up in a condo and just generally having a harder time financially than many of our friends. It turns out a lot of them have secret sources of money. And not just for homes. Weddings, vacations, furniture... a lot of the stuff the people seem competitive about and proud of in their 30s? So many people are just being bankrolled by rich boomer parents who are willing to shell out for this stuff. And this is why people you work with who don't seem to make that much more (or more at all) than you often seem more financially savvy or to have more savings. They literally just have more money! It's family money, and sometimes they never see it (like when their families foot the bill for vacations or buy them consumer goods) so they will act like it's not really wealth. It is!

Anyway, buying a home without any financial assistance, especially if you grew up working class or poor and also have education debt, is incredibly hard and hats off to all of us who manage to do it. It requires lots of pinching pennies and compromise and is very emotionally stressful as well. These people who can dial up an extra 30-40k on a moments notice from the Bank of Mom & Dad have no idea.

I think younger people are maybe more sensitive to this dynamic and are therefore more open about saying "oh yeah, my parents helped us buy this place otherwise we'd never have been able to get it".

I can only speak for myself but we had parents who helped us significantly when buying our first home and it's not something I'm embarrassed by or feel bad about. It's just a fact. For people saying "why would you ever admit to it??" or who make derisive comments involving "mommy and daddy" I wonder what sort of relationship they have with money. I suspect they give it too much power and maybe have a lot of their sense self worth tied up in money or their career. Money is just a tool - you're not a good person for having more of it or a bad person for having less of it. If you have family willing and able to help you buy into a comfortable place to live then be thankful you have that support.

I am PP. I don't think anyone needs to feel embarrassed for getting help from parents in buying a home. I do wish people would be more honest about the help they get because those of us who don't and cannot get that kind of help wind up feeling like we somehow failed at not making more money or saving more when in reality what we failed at was being born to wealthier parents.

I think part of the problem is that a lot of people I know who got substantial help from their parents have the (mistaken) impression that this is normal and that "everyone" has that. We don't. I have had friends say critical or unfair things about the fact that we bought a condo instead of a house ("oh did you not know condos don't appreciate as well?") or the we bought in a difficult school district ("oh we thought ahead about schools because we knew we wanted to have better options"), or the fact that we have not yet "upgraded" to a larger home ("oh I guess you guys just don't like having more space! it's so important for us"). These kinds of comments are so, so common in DC and while I know to distance myself from people like this, it doesn't make it hurt less.

I think it would be harder for people to pull this crap if people were more honest about where their money to buy a home came from. If people could be more honest, we'd all realize that buying a home is really just about one thing -- having money. A lot of people want to wrap it up in virtue, like buying a home (especially buying one young) is evidence of your superior financial abilities. It's not. I would have bought a home at 22 had I had any money or a job that paid well enough to get me a loan. I didn't. I bought my home in my early 30s only after working and saving for a decade, and marryign someone who also worked and saved, and even then we barely scraped it together. People who act like that's evidence of our inferior planning or saving ability ("maybe spend less on lattes and avocado toast!") when in reality our big mistake was not being born rich, piss me off. If that's not you, great. You don't have to be embarrassed but you should also recognize that your ability to buy a home, or to buy a bigger or nicer home, is not evidence of your superiority. It's evidence of your parents bank accounts. Full stop.

[Anonymous]

Anonymous wrote:https://nypost.com/2019/11/22/millennials-most-comfortable-commiserating-about-money-survey-shows/

I don't know how old you are but the younger generations are increasingly comfortable talking about money with friends. I know we don't talk about it often or with everyone (or even many people) but I'm sure we talk about financial stuff far more frequently than my parents' generation who talk about it approximately never.

I’m the PP and I’m a millennial.

[Anonymous]

In my mid-30s and grew up UMC. Most of my social circle from childhood/adolescence had their college and downpayment paid for by parents or grandparents (or a combination). Yes, it is a form of wealth transfer and extreme privilege.

To answer the 'how would you know this' question, it becomes pretty apparent when most of your friends are buying houses immediately after graduation or houses that are worth well beyond 4-5x the ballpark of what the person is making. Some talk about it openly, because it is pretty normal among our friends. We know of a few families where kids were given different amounts and it caused drama, so we heard about it there. Others have brought it up while weighing the decision to have a smaller PITI/larger amount down vs. buying more house.

For the "we like to spend our time with adults" person, I fail to understand what you think an 'adult' would do if offered money towards their home purchase. Turn it down? Suffer to prove a point? For plenty of families this is a form of estate-planning, and the 'adult' thing is to maximize the families' financial situation.

[Anonymous]

Anonymous wrote:I think part of the problem is that a lot of people I know who got substantial help from their parents have the (mistaken) impression that this is normal and that "everyone" has that. We don't. I have had friends say critical or unfair things about the fact that we bought a condo instead of a house ("oh did you not know condos don't appreciate as well?") or the we bought in a difficult school district ("oh we thought ahead about schools because we knew we wanted to have better options"), or the fact that we have not yet "upgraded" to a larger home ("oh I guess you guys just don't like having more space! it's so important for us"). These kinds of comments are so, so common in DC and while I know to distance myself from people like this, it doesn't make it hurt less.

Ouch. I was cringing through reading that. You have some friends who are wildly out of touch with reality. Did they grow up in elite private schools, colleges, etc?

[Anonymous]

Anonymous wrote:In my mid-30s and grew up UMC. Most of my social circle from childhood/adolescence had their college and downpayment paid for by parents or grandparents (or a combination). Yes, it is a form of wealth transfer and extreme privilege.

To answer the 'how would you know this' question, it becomes pretty apparent when most of your friends are buying houses immediately after graduation or houses that are worth well beyond 4-5x the ballpark of what the person is making. Some talk about it openly, because it is pretty normal among our friends. We know of a few families where kids were given different amounts and it caused drama, so we heard about it there. Others have brought it up while weighing the decision to have a smaller PITI/larger amount down vs. buying more house.

For the "we like to spend our time with adults" person, I fail to understand what you think an 'adult' would do if offered money towards their home purchase. Turn it down? Suffer to prove a point? For plenty of families this is a form of estate-planning, and the 'adult' thing is to maximize the families' financial situation.

It’s only one form of estate planning and you wouldn’t be offered nor would you take the money if you could pay for that stuff yourself. You’re getting it because it’s understood you’re not going to get there on your own.

[Anonymous]

I think everyone assumes we did because I have well off parents. They didn’t give us any money for downpayment, but they do contribute to DC 529s which in a way helps because we don’t feel we have to contribute as much. But we didn’t overextend ourselves because of that, because we want to have enough savings to fund our grandkids college too.

[Anonymous]

Anonymous wrote:There are rules as to how much money parents can “gift” their kids per year. I don’t think they can just plop down $100K for a down payment on their child’s house. However, they can pay a private school directly and then also gift the appropriate amount to their kids. A lot of wealthy parents do this instead of saving it for inheritance.

You can gift your kids more than the maximum gift amount by calling it a loan and then writing it off by the maximum gift amount each year. It's all by the book as long as you charge the applicable federal rate (AFR) which is like 1.3% or something very low.

So in your $100K example: if the parents are married and the kid is married you could give them $100K up front - $64K is a gift ($16K to each from each) - and $36K is a loan. Charge 1.3% (or whatever it is) on the $36K - so $36,468 - and then write off that full amount the next year as part of your $16k/yr annual gift exclusion.

In this way you could $500K to someone and write it off by $64K a year as long as both couples stay married. (Not an attorney but that's my understanding).

[Anonymous]

Anonymous wrote:It’s only one form of estate planning and you wouldn’t be offered nor would you take the money if you could pay for that stuff yourself. You’re getting it because it’s understood you’re not going to get there on your own.

I don't understand this logic at all. What do you think older wealthy people do with their money? Give it all to the circus?

[Anonymous]

Anonymous wrote:

Anonymous wrote:In my mid-30s and grew up UMC. Most of my social circle from childhood/adolescence had their college and downpayment paid for by parents or grandparents (or a combination). Yes, it is a form of wealth transfer and extreme privilege.

To answer the 'how would you know this' question, it becomes pretty apparent when most of your friends are buying houses immediately after graduation or houses that are worth well beyond 4-5x the ballpark of what the person is making. Some talk about it openly, because it is pretty normal among our friends. We know of a few families where kids were given different amounts and it caused drama, so we heard about it there. Others have brought it up while weighing the decision to have a smaller PITI/larger amount down vs. buying more house.

For the "we like to spend our time with adults" person, I fail to understand what you think an 'adult' would do if offered money towards their home purchase. Turn it down? Suffer to prove a point? For plenty of families this is a form of estate-planning, and the 'adult' thing is to maximize the families' financial situation.

No, consider voting differently.

[Anonymous]

There is no shame in having relatives help you financially.

My parents loaned me part of the downpayment on my first home. I repaid it promptly. Some people are gifted money, private school tuition for the grandkids, cars, vacations, homes, etc. My adult nephew does not have a paid job and is entirely supported by his father.

None of these people are bad people. They pay taxes, they buy things, they volunteer and contribute to society.

There is no problem with building generational wealth and passing it on when the time comes. It's rare, but always pretty awesome, to pass it on when the children or grandchildren can make most use of it, in the prime of their life, or to invest in education. My parents can not to that for me, but I hope to do that for my children and grandchildren.

Anything else, and it's just jealousy talking.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It’s only one form of estate planning and you wouldn’t be offered nor would you take the money if you could pay for that stuff yourself. You’re getting it because it’s understood you’re not going to get there on your own.

I don't understand this logic at all. What do you think older wealthy people do with their money? Give it all to the circus?

In my family only the siblings who didn’t have high incomes got money for houses. My share will go to my kids. I will not get anything because my spouse and I are millionaires many times over. Yes, I had some help with education but I also paid for my own graduate school.

[Anonymous]

Anonymous wrote:

Anonymous wrote:In my mid-30s and grew up UMC. Most of my social circle from childhood/adolescence had their college and downpayment paid for by parents or grandparents (or a combination). Yes, it is a form of wealth transfer and extreme privilege.

To answer the 'how would you know this' question, it becomes pretty apparent when most of your friends are buying houses immediately after graduation or houses that are worth well beyond 4-5x the ballpark of what the person is making. Some talk about it openly, because it is pretty normal among our friends. We know of a few families where kids were given different amounts and it caused drama, so we heard about it there. Others have brought it up while weighing the decision to have a smaller PITI/larger amount down vs. buying more house.

For the "we like to spend our time with adults" person, I fail to understand what you think an 'adult' would do if offered money towards their home purchase. Turn it down? Suffer to prove a point? For plenty of families this is a form of estate-planning, and the 'adult' thing is to maximize the families' financial situation.

It’s only one form of estate planning and you wouldn’t be offered nor would you take the money if you could pay for that stuff yourself. You’re getting it because it’s understood you’re not going to get there on your own.

Saying you wouldn’t be offered it unless you needed it is totally untrue. People get money from parents who don’t “need” it. I know parents who pay for their kids country club memberships and schools. They don’t need that money but it’s certainly helpful.

[Anonymous]

I don’t know. I have never asked and it’s never come up. Among my childhood (middle class) friends, none.

[Anonymous]

Anonymous wrote:Paying for college is indirect support.

This is such an important point.

We didn’t have any direct help in buying our house. But our parents paid for college so we emerged debt-free, and our parents paid for a 150-guest wedding that resulted in thousands of dollars in cash gifts that we put toward our downpayment.

So we definitely had family support, even if it wasn’t in the form of a direct handover of money for our house purchase.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:It’s only one form of estate planning and you wouldn’t be offered nor would you take the money if you could pay for that stuff yourself. You’re getting it because it’s understood you’re not going to get there on your own.

I don't understand this logic at all. What do you think older wealthy people do with their money? Give it all to the circus?

In my family only the siblings who didn’t have high incomes got money for houses. My share will go to my kids. I will not get anything because my spouse and I are millionaires many times over. Yes, I had some help with education but I also paid for my own graduate school.

Your family has one way of doing things but don't make the mistake of thinking that's how all, or even many, families in the same position handle things.