Buying a first home is a major milestone in life. Obstacles such as student debt, new careers, limited credit histories, and scant savings can make the path to homeownership tricky. Some first-time buyers need a little help from family members to afford a home purchase. Parents often want, or feel obligated, to help their adult children buy a home. However, lending money to adult children can be awkward and may end up damaging the relationship. Happily, there are ways that parents can help the adult children down the path to homeownership while protecting their own finances and nurturing relationships. 

Mortgage approvals and interest rates depend heavily on credit history. Getting an early start on establishing an excellent credit rating is a no-cost, educational way for you to help children prepare for future home purchases. When your child has then first part-time job in high school, help them apply for a credit card. Doing this before they move out of the family home allows you to provide more guidance on paying balances on time and using credit appropriately. 

With median rent prices for a one-bedroom apartment soaring over $1,171 in every area of the US, your adult child probably dedicates the bulk of their budget to housing costs. Clearing out their old room and letting them move back in may be the most effective way to help young adults save towards a down payment and other homeownership costs. But be aware that this plan may not go smoothly without some ground rules in place. Establish up front that they will put the entire amount of their usual rent into savings and decide if they will help pay for utility and food costs. It is also a good idea to discuss who will complete various household tasks and what type of privacy everyone can expect. 

If you are financially able to do so, giving a no-stings attached monetary gift to be used as a down payment on a home can put your adult child on the fast path to homeownership. Many parents prefer this to lending money because it cuts out the awkward issue of repayments. The gift of a down payment can be especially helpful if it is given in lieu of an inheritance, since your adult child will have access to the funds when they need them most, rather than later in life when they are more financially secure. However, a gifted down payment isn’t always favorably viewed by lenders, so it pays to speak with potential mortgage brokers before handing over the cash. At the least, the lender will want to see a gift letter explaining the relationship, where the funds came from, and the exact amount of the gift. 

A down payment may be the largest amount needed in the purchase of a house, but an experienced homeowner knows that the initial cost is just the tip of the expenses to come. Moving into a first house often requires purchasing appliances, furniture, window coverings, and more. While gifting these items to your adult children may not make it possible for them to afford a home, it will provide some wiggle room in their budget and make their first home much more comfortable. A home security system, which you can read more about here, is another excellent housewarming gift since it will provide you both with peace of mind. 

Buying a new home often means taking on a list of DIY projects, especially if your adult child opted for a fixer-upper. The downside to buying a home that needs a bit of work is that there are added financial and time commitments, which your adult child may find challenging. Rather than letting them hire professionals, dust off your DIY skills and lend a hand. Not only will you be able to teach them some of the most useful skills that every homeowner should have, but you will also help them save money.