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How Can Parents Help Their Children Buy A Home?

How Can Parents Help Their Children Buy A Home?One of the most common dreams is homeownership; however, the cost of buying a house is rising quickly, and many children cannot afford to buy a house even after they finish school. They might be encumbered with student loans, and they could have a difficult time finding a job. Fortunately, there are ways parents can help their adult children buy a home.

Help Children Build A Healthy Credit History As Early As Possible

One of the biggest factors involved in an application for a home loan is the credit score. One reason why children have a difficult time qualifying for a home loan is that their credit scores are not high enough. They simply do not have a lengthy credit history. Parents should help their children build credit as early as possible. One way to do that is to help them take out a credit card and co-sign for it, giving children a lengthy credit history of on-time payments when they apply for a home loan.

Let Children Live At Home Temporarily

Another obstacle that gets in the way of homeownership is the size of the down payment. For children to qualify for a home loan with a favorable interest rate, they need to have a sizable down payment. It can take a long time for children to save 20 percent for a down payment, so parents should consider letting children live at home temporarily, rent-free, so they can save money for a down payment.

Offer To Be A Co-Signer

Finally, parents can also make it easier for children to buy a home by co-signing for the loan. While some parents might be reluctant to do so, this could be the best way to help children qualify for a mortgage. If parents are confident that their children can afford the mortgage, they should consider becoming a co-signer to give the lender a greater degree of confidence.

Make It Easier For Adult Children To Buy A Home

These are a few of the best ways parents can make it easier for their children to purchase a new home. Even though homeownership can be a challenge, it doesn’t have to be a fantasy. Parents should start planning for their children as early as possible to make it easier for them to qualify for a home loan.

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Homeownership And The American Dream: Is It Changing?

Homeownership And The American Dream: Is It Changing?There are a few parts of American culture that people believe define this country. One element is the dream of homeownership. There is a strong belief that people need a place to call home. Therefore, since the dawn of this country, the government has tried to incentivize people to purchase a home.

At the same time, there are some people who are looking at the younger generation, wondering if this American Dream is starting to change. Is homeownership still a part of the American Dream?

Americans Still Believe In The Idea Of Homeownership

Hard work and owning a home appear to be inseparable. There is still a belief that as long as people work hard and save money, they can fulfill the American Dream by buying a home. Real estate professionals regularly take surveys that show that people still want to be a homeowner for the sake of owning a home. While it is true that owning a home provides more control and creates investment opportunities, owning a home still has an allure to people that is undeniable.

Millennials Want To Own A Home As Well

Millennials appear to believe most strongly in owning a home, indicating that this is still a part of the American Dream. Even though some people thought that millennials were simply going to rent forever, this is not the case. The reality is that many young adults have not purchased a home because they could not afford one. Student loans and a lack of wage growth compared to housing increases simply made it harder. With interest rates lower than they ever have been in the past, many young adults are ready to make the jump to purchase a home.

Homeownership Is Still A Part Of The American Dream

Ultimately, many millennials simply put off the idea of getting married and having children, so they put off the idea of homeownership as well. Now that this milestone has arrived, there are many young adults who are looking to purchase a home for the first time. This indicates that owning a home is still a key part of the American Dream.

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Taking A Closer Look At Affordability: Renting And Buying

Taking A Closer Look At Affordability: Renting And BuyingThere are many people who are looking at the housing market wondering if now is the time to make the jump from renting to owning. At the same time, is it more affordable to rent a home? Or, is it a smarter move to buy a home? Even though many people like the comfort of renting because it is someone else’s problem if something goes wrong, waiting too long to purchase a home could be costly. Here are a few of the most important points you need to keep in mind when it comes to renting versus buying a home.

Renters Spend A Higher Percentage Of Their Income On Housing

First, renters usually put a higher percentage of their income toward housing than homeowners. When looking at the numbers, people may believe that the percentage is higher for renters purely because people who own homes make more money; however, this is not necessarily the case. People who rent still spend a greater percentage of their monthly income on housing than people who own a home.

Renters Often Have Trouble Investing In Other Assets

One of the major advantages of owning a home is that it is going to appreciate over time. Not only is a house an investment, but because homeowners spend less of their money on housing, they have money to invest in other assets. For example, someone who spends a lot of money on rent might not be able to invest in retirement accounts, such as a 401k. Homeowners are not only building equity in their homes but also investing money elsewhere.

Rent Goes Up While Mortgages Stay The Same

A lot of homeowners decide to take out a 30-year fixed mortgage, which means that their mortgage payments are going to stay the same throughout the life of the loan. Renters are more vulnerable to cost increases. Whenever someone renews a lease, rent payments usually go up. Therefore, this projects vastly different economic futures for homeowners versus renters. With a home loan, the only expenses that might go up are taxes and insurance. In contrast, renters are subject to the supply and demand laws of the rental market.

Now might be the time to make the jump to homeownership.

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