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Should Parents Invest in a Child’s Mortgage?

All parents want to see their children enjoying happy and successful lives.  Education expenses is one very large investment most parents make in the future of their children.  In today'sreal estate marketsbuying a home is much more difficult than it was just 6 years ago, and many young people, even those with good jobs and salaries can't make it happen.  They can't get a mortgage due to tougher credit standards and higher down payment requirements.  Also note, the child must be 18 years of age and have 2 years job experience in order to qualify. 

It's those down payment requirements that bring the parents into the picture, as well as the possibility that they'll be required to co-sign and be responsible for their child's loan.  If the child is going to the parents for a loan or help, it's usually because they can't qualify with a bank.  So, the bank considers them too risky, but what should the parent who can help do?  Of course, the financial abilities of the parent will influence the decision greatly.  And, they may consider past credit behavior of their child in making a decision.  FHA loans in Las Vegas are a great program to use for a parent who wants to co-sign for a child and yet still offers a low 3.5% down payment. 

A T.V. network did a survey on their website, asking parents to respond as to whether they would help their child with a mortgage.  At last count, here were the results:

  • 34% - Yes, I would take the risk.
  • 4% - Yes, I don't want them living with me.
  • 29% - No, although I could afford it, I don't want to be their banker.
  • 9% - No way, I couldn't afford to help them.
  • 24% - It's not an easy "yes" or "no" answer.

The results are pretty well-distributed across the opinion spectrum.  What would you say, as you may be asked for real?

Call to see if you and your son/daughter can qualify
Casey Moseman

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