Posts Tagged With: Home Buying

Which source of home-buying finances has “millions of satisfied customers, has never asked for a bailout, and really cares about its borrowers”?  It’s the the “Bank of Mom and Dad.”

Parents and relatives are a common source of funds when buying a home.  With a difficult housing market, this financial assistance for young homebuyers is often necessary.  According to a study by Legal & General, the “Bank of Mom and Dad” is the seventh largest source of home-buying funds. The top six were Wells Fargo, JP Morgan Chase, Quicken Loans, Bank of America, U.S. Bancorp, and Freedom Mortgage.

The downside of this trend is that many parents are postponing, and even endangering, their retirement years to provide financial assistance to their children. Before accepting funds from family members, consider these factors:

• Assess the current and future financial impact for family members involved.
• Evaluate the tax situation and costs that might be involved.
• Determine potential implications for other family members.
• Consider other sources and possibilities, such as making it a loan rather than a gift’ also investigate government or private programs available to lower-income or first-time home buyers.

 For additional information on family assistance for home buying, go to:

Link #1

Link #2

Teaching Suggestions

• Have students create a video presentation to demonstrate the positive and negative aspects of parents providing funds to their children for buying a home.
• Have students conduct research online and with financial institutions to determine programs that are available to lower-income or first-time home buyers.

Discussion Questions 

1. How might providing funds to children for buying a home affect the financial and personal situation of parents and other family members?
2. Describe actions to take before parents provide funds to their children for buying a home.

Tiny houses (usually 400 square feet or less) have become popular with many people, as they offer these benefits:

• quick access to a comfortable home with probably no mortgage payments.
• you can learn from your home-building mistakes if you decide to build a larger home.
• lower home ownership costs with the possibility of living off-grid.
• an environmentally-friendly design with little or no toxins.
• a simpler, less cluttered life with creative ideas to effectively use space.
• potential for better communication with family members as a result of close quarters.

However, common drawbacks of buying and living in a tiny house include:

• limited privacy, no place for solitude.
• limited living space; little room for entertaining guests and family.
• limited kitchen and storage space.
• more trips to the store-no buying in bulk, and usually driving further to stores.
• tiny houses may be on wheels or on a foundation, restrictions may exist as to where you may park or build.

For additional information on tiny houses:

Link #1

Link #2

Teaching Suggestions

• Have students search for online videos about tiny house living to obtain additional information on benefits and drawbacks.
• Have students design a tiny house that would fit their life situation.

Discussion Questions 

1. What personal factors should be considered when building a tiny house?
2. Describe life situations of people who might be appropriate for tiny house living.