With the cost of living and housing constantly increasing, parents helping their grown children buy a home has become the norm. Whether through a monetary gift, a loan, or co-signing, the decision to step in can impact family finances and relationships. Here, we explore why parents may—or may not—want to help their children enter the real estate market, focusing on the important factors to consider carefully when making this decision.

Do you (or your kids!) want more homebuying advice? Download our homebuyer handbook right here!

1. Financial Security & Stability

Buying a home can provide stability, independence, and security that renting may not offer. Homeownership can build equity over time, offering a foundation for future financial well-being. But it’s important to consider your own long-term financial security.

The first question you should ask yourself is—will providing this assistance affect your retirement or other financial goals? If so, there may be different ways to help, such as offering budgeting advice or exploring alternative financing options together.

Buying a home is a big decision. It’s important to gather as much information as you can. Here are a few more blogs about buying a home that you might find interesting:

2. Building Wealth Early

Homeownership can be a significant wealth-building tool, especially if your child buys a property that is going to appreciate over time, such as one in a growing or transitioning neighbourhood, or a home on a large lot in a desirable area. By helping them enter the market, you may be giving them a substantial head start on building wealth.

Still, the real estate market holds its own risks, such as changes in interest rates and fluctuating housing prices. Although property is often a solid long-term investment, it has its ups and downs like any investment, and timing the purchase can have a significant impact. Talk openly about these risks with your child so they understand both the rewards and responsibilities of homeownership.

Here are The Lisa Hartsink Team, we believe in educating our clients so they can make the best decisions for their unique situations. Learn more about our approach to homebuying right here.

3. Fostering Independence vs. Creating Dependency

Providing financial assistance to your children as they enter the housing market can be a compassionate choice that opens doors otherwise left closed to many. However, it’s wise to consider the balance between offering help and promoting financial independence.

Circumstances will differ for everyone, but if they’re not ready for the financial responsibility of homeownership, perhaps a gradual approach—like setting a savings goal for them or offering to match their savings—is a better solution. This allows them to work towards the purchase with your help while still feeling a sense of ownership and accomplishment.

4. Supporting Them Through a Competitive Market

Today’s housing market can be challenging for younger buyers due to higher prices and borrowing costs, and limited inventory. This can be frustrating, especially if they’re financially responsible but simply can’t meet the high entry costs.

By co-signing or providing their down payment, you’re making the market more accessible to them. However, remember that this role may involve ongoing financial responsibility, so setting limitations from the start is essential to avoid issues down the road.

We have more homebuying blogs for you right here:

5. Family Bonding or Potential Strain?

For many, helping a child buy a home is an emotional decision driven by love and the desire to see your children thrive. Yet financial entanglements can lead to stress or strain if expectations aren’t clearly set.

To prevent misunderstandings, establish clear boundaries and keep open lines of communication. Is it a loan you expect to be reimbursed for, or a gift? What are the terms of the loan? Are you offering one-time assistance or long-term support? Discuss your terms and expectations clearly and ensure everyone is on the same page.

There’s no one-size-fits-all answer to the question of whether or not you should help your children buy a home, but it’s a decision that benefits from empathy, open discussion, and careful planning. Supporting them in ways that fit your family’s unique dynamics and financial situation can make the process smoother and more fulfilling for everyone involved.

If you are considering helping your child buy their first home, connect with us to learn about all the available options, from government programs to mortgage assistance. We have years of experience and a vast network of professionals who can help!

Are you ready to start the homebuying process with your kids? You call us directly at 905-873-9944 or email info@lisahartsink.com, we’re always happy to help!