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Contact Charlie Mowery

Phone: 435-619-3422


Sep 10, 2014

Buying Your Child A Home

A Good Investment or a Big Mistake?

As parents it’s hard to watch your children grow up and become more independent, but it’s even harder to watch them struggle with the financial pressures that come with being adults. That’s why more and more parents are buying their college graduates a home or an apartment. They see it as a win-win situation because their children get a nice place to live, and they are making an investment in the housing market.

With many homes for sale in St. George, Utah, there are plenty of homes to choose from. But before making such a loaded decision about buying your child a home, here are some tips and tricks on the most efficient way to help your child purchase their first home.

Put Their Name On The Title

Unless you are wanting to directly invest in the housing market in St. George, there is really no need to put your name on the title. If your child has their name on the title they will be more motivated to make payments on time and be more responsible. Because that’s what this experience is about, right? Helping to lift your child’s burden while teaching them responsibility.

You Are The Mortgage Lender

Assuming that you have enough cash and asset balance in your account, you should make the down payment on the home as a cash donation. Writing it on your books as a donation instead of a gift will help you to avoid gift taxes. From here there is an expectation that your son or daughter will pay you the monthly mortgage payment plus interest (if you choose to charge any).

There is an advantage with your child having you as the mortgage lender than other commercial lenders. They can bypass all the fees and penalties in the event that they cannot make payments. If that’s the case you can always transfer the title to yourself, and make your own decision from there with what to do with the home.

For more information about this debate click here.

Ultimately the decision is up to you to decide whether or not to help your child buy a home. If you do help, you have the advantage of a good investment and peace of mind that your child will be living in a safe and clean environment after graduation. If not, your son or daughter will get to learn financial responsibility on their own, which isn’t always a bad thing.

Either way, if you are looking for a new home for you or your child in St. George, Utah, feel free to contact us and we would be happy to help you in your search!

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