Many parents are stuck on what they should do when it comes to helping out their children with the purchase and mortgage of their first homes. In order to make the right decision about whether or not to help your child out consider the following:
1. Helping your child can be a great and very positive thing to do but it may put a damper on the relationship between the two of you if the money is given with a lot of strings attached.
2. Never give out more than you can afford. The most important thing to consider is your own retirement goals. Never give out money that will endanger these goals. A choice should be made based on sound financial decision making and not on emotional attachment and desire to help out your child.
3. Personal loan agreements can come in extra handy when it comes to lending your child some money to assist with a down payment for a home purchase. Your attorney can provide them for you or they can be accessed through other resources on the Internet. It’s always a good idea though to have a lawyer look through the papers anyway to make sure that all aspects of the loan have been covered.
After your child has made the down payment and is moving in you must respect his privacy and offer your support. Even though you have helped with the purchase the house now belongs to your child and he has full control of it. As long as he is making the loan payments on time, you should not interfere in any way in other aspects of his life.