As retirees or parents, we often strive for mortgage-free lives, but we also recognize the challenges our children face in entering today’s competitive real estate market. However, fear not! There are three innovative solutions to ensure our children can buy homes and secure their future in real estate. And trust me, you might not have considered number 3!
1. Co-signing:
The stress test and rising rates have made it increasingly difficult for young homebuyers to qualify for mortgages, even with great-paying jobs. By adding a trusted co-signer with a good income and little to no debt, like yourself, we can help our kids break into the market now. Together, we can devise a short or long-term strategy to remove you from the title later, ensuring both financial security and independence for our children.
2. Gifted Down Payment
If you have the resources or equity, gifting your children an early inheritance can be a game-changer. Saving for a down payment can take years, and with the market gaining in price rapidly, time is of the essence. You may not realize that increasing your mortgage by $100K could mean only an additional $500 to $600 per month, depending on interest rates. This could be life-changing for your children, enabling them to enter the market now and secure their future.
3. Invest in Property
Consider purchasing an investment property now and explore various options to benefit your children in the future. For example, you could gift it to them when they’re ready, or offer it as affordable housing while they attend university. Let’s face it, rent is skyrocketing. Or, you can sell the asset in the future and use the equity to kickstart their real estate endeavours. This forward-thinking approach not only helps our children but also secures their financial future.
We’re Here to Help
Whichever method you choose, helping your child enter the market now could be the best opportunity for them. Real estate has historically shown upward trends in value, making it a lucrative investment for both you and your children. If you have questions or need assistance running numbers, I’m here to help. Let’s secure a brighter future for our children together!
