You remember the struggle of buying your house, the financial challenges, the frustrations, and that sense of accomplishment that follows the purchase. Today, young adults are faced with the additional burden of student loans before they even start their first jobs. 

Millennials’ share of mortgages is expected to be highest at 50% in 2020, outpassing both Gen X and Baby Boomers. Investing in real estate is becoming more stressful than ever. As a parent, it is only natural wanting to help out your children through a crisis. If your children are eager to invest in real estate, then there is more than one way for you to support them. 

1. Offer To Pay Down Payment or Part of Expenses

The most obvious way to help is to offer finances in times of need. If you have the resources, then you can choose to gift them the down payment. Alternatively, offer to pay for other expenses that occur when you buy your home such as realtor fees, furnishing, or closing costs. Remember that a formal gift letter should always accompany such gifts of a down payment, stating that the recipient is not in debt to the giver. This letter would increase the chances of your child getting the mortgage approved. 

2. Offer to Provide a Guarantee

Parents can also help children to get their loans by providing a guarantee to the lender. This could be as guarantee mortgage payments or pledging equity as security. Oftentimes, this guarantee is limited based on the value of the equity, which could be any property that you own. The loan will remain entirely in your child’s name. On the other hand, if your child defaults on a loan payment, then you, as a guarantor, would be responsible for the payments. 

3. Become a Co-Borrower

If your child’s credit history isn’t appeasing for the lender, then you can offer to co-borrow. If this is an option, make sure you discuss with the lender upfront to find out more about the conditions. Based on the parameters of responsibility, some lenders would also call this co-signing. While this might make the home buying process more manageable, it makes parents equally responsible for mortgage payments and might affect your credit score to make another purchase in your name soon. 

4. Offer Accommodation 

Millennials are living paycheck to paycheck, and the rent makes a big dent in their monthly income. Add in the hefty student loan payments, an increasing number of young adults find it easier to live with their parents. To facilitate their savings, you can always offer them free accommodation at your house. It will not only relieve them of the monthly payments but give them more time to get their finances in order. 

5. Help Build a Great Credit Score 

The earlier you prepare your child to be financially sound, the better their credit history would be. There is no need to stress the weight a good credit score holds on mortgage approval. Aspects  such as how they handle money, how they have kept up with the payments, and how often the credit cards are used, could all have an impact on the decision. Make it a point from their early years to familiarize your children with the concept of debts and punctual payment. If urgent at the time, you can also offer to help close some deficits to improve their score for the mortgage application. 

Besides the financial support, parents have lessons from their own experiences to impart to their children before investing in real estate. Be it recommending a location, or helping them find a real estate agent by reading service review, your bits of wisdom would prepare them to navigate through the buying process with more ease.