How To Avoid Asking Family For a Down Payment
Now that you have received your stimulus check, you may be trying to decide how best to use those funds. Many will need it for the basic necessities, however, if you are one of the lucky one's that can save those funds as a down payment on a home, then Real Estate is a very stable and good investment to consider.
While we all hope that money could grow on trees, most first time home buyers find that themselves turning to family to help them with their down payment. Next they find that those requests often come with strings attached or unwanted advice. A recent study shows how many buyers have been receiving gifts or loans and the percentage of those that include unwanted advice on where and what to buy.
"According to a new report from the National Association of REALTORS®. Thirty-two percent of first-time home buyers received a gift or loan from a relative or friend last year, according to the report, and 8% of repeat buyers received down payment gifts, according to “2020 Downpayment Expectations & Hurdles to Homeownership.” The report, released today, is based on surveys of REALTORS®, recent home buyers, and consumers.
Members of the silent generation and older baby boomers tended to be the most generous in helping an adult child or family member with money for a down payment (at 34% and 31%, respectively), Millennial buyers were the most likely age group to receive a down payment gift, at 24%."
According to the study, "financial assistance may come with strings: Family and friends who contribute are more likely to provide input on what and where the buyers purchase. Half of REALTORS® surveyed said contributors had influence over what the buyers purchased, and 35% said contributors had influence over where the buyers purchased."
To avoid this uncomfortable interaction with family, tuck those funds away for a down payment or use them today to purchase your first home. Many lenders only require a small amount for a down payment so don't hesitate to contact your loan officer to see if you have the funds needed to get started.