Getting Your Parents Help
With Financing A Home
By: Dan Lewis
When buying your first home, there are a
lot of hurdles to overcome. Financing is one of them. For many people, this
means applying to the friendly bank of mom and dad.
Getting Your Parents Help With Financing A Home
They say you should never do business with your friends. It is a time tested
way to make them former friends. The bonds that tie us together can get
tangled when differences of opinion arise. While this is all true, it barely
registers compared to the complexities of a family. When a group of people
live together for twenty years or so, the complexities only get more and
more tangled.
While doing business with family members is often unwise, buying your first
home often requires help from them. Coming up with cash for down payments,
closing costs and even qualifying for a loan can be problematic. The bank of
mom and dad often represent your best option to getting the deal done. While
this is true, most people are uncomfortable with the idea of hitting up
their parents for the help. You are out of the house and supposed to be
independent. Walking through the door with hat in hand doesn’t exactly make
you feel independent. Well, there is a solution that both you and your
parents can use without too much suffering.
Allow me to introduce you to the equity sharing agreement. This little dandy
can be used by anyone, but is most often used by parents and their kids when
that first home is purchased. The agreement is pretty much what it sounds
like. You find a home you want to buy and then agree to an equity sharing
arrangement. Let’s take a closer look.
Assume I find a home for sale for $300,000. I need a $60,000 down payment
for it, and cannot float this amount no matter how many quarters I roll. I
go to dear old mom and dad and hit them up with an idea. If they agree to
pay the deposit and closing costs, I will make all the mortgage payments,
pay the property taxes and agree to keep my room clean. In exchange for
this, they will own 20 percent of the home and I will own 80. When the home
is eventually sold, I will pay them 20 percent of the gain. Simply put, I
get their help in purchasing the home, they eventually get something out of
it and I don’t feel too guilty about asking them for help. Hey, it is as
close to a win-win as you are going to find.
Buying your first home can be a challenge from a monetary stand point. Don’t
feel too guilty about applying to the bank of mom and dad.
Article Source:
http://www.content.onlypunjab.com
Dan Lewis is with Great Western Mortgage - providing home loans for
borrowers with good credit, bad credit and unique situations.
[Internet-Marketing-One.Com]
