The Support of Parents in Buying a First Home: A Personal Journey

When acquiring our first home, the level of support from our parents can vary greatly, ranging from none to substantial assistance. In my case, my husband and I received no financial input from our parents, which was common for our generation. However, our millennial children have had different experiences, needing various levels of support from their parents.

First-Hand Accounts: My Children's Home Buying Experiences

Child 1: Daughter and Her Husband Needed to Borrow

My daughter and her husband faced the challenge of buying their home. They borrowed a considerable sum of 29,000 and insisted on repaying it. They did so quickly, demonstrating their commitment to financial responsibility. They were able to repay this loan ahead of schedule, showing their ability to manage their finances independently.

Child 2: Son and His In-Laws Gifted a Significant Amount

For my son and his wife, the situation was different. They received substantial financial gifts from their in-laws, amounting to hundreds of thousands of dollars. However, we also contributed by gifting them 50,000 for the closing processes, illustrating the shared commitment to their home purchase.

Child 3: Daughter’s Overpriced Market and Family Gifts

A year ago, my daughter faced a market where housing prices had skyrocketed. In such a competitive environment, young people like her often require external help to afford a home. I gifted her 400,000 to assist with the purchase, reflecting the reality of today's real estate market.

Understanding Gift Tax and Financial Gifts

For those who mistakenly believe they need to file a gift tax on amounts over $19,000 per year for each recipient, it is important to clarify that this is not the case. Instead, you need to complete IRS Form 709 only when informing the IRS of financial gifts. The lifetime gift tax exclusion is $13 million, which is unlikely to be surpassed by most individuals in their lives.

My Home Buying Experience: Independence and Self-Reliance

My first home was purchased in 1996 for $73,500. Relying solely on my savings and a first-time homebuyer loan, I managed to save and qualify for the loan. I did not see my family as a financial safety net but rather as a supportive network rather than a stepping stone.

The Role of Financial Responsibility

My husband and I have consistently financed all our homes independently and without aid from our parents. When we purchased our first house in 1979, we had a mere $23 left in our checking account. This reflects a strong commitment to financial independence and responsibility.

Our personal journeys highlight the changing dynamics of home buying and the different levels of support modern families may or may not receive. Financial responsibility and independent decision-making remain key values for first-time homebuyers, regardless of whether they receive assistance or not.