How to Ask Your Parents for Money to Buy a Home

It's not always fun to ask parents for money, but sometimes it's the only way to afford to buy a home.

Especially in today's lending world -- with banks tightening mortgage guidelines -- coming up with a down payment can be a real struggle. For example, California's median home sales price for June is about $328,000, for single-family homes and condos. This means that unless a buyer is obtaining a VA loan (which is zero down), the minimum down payment on such a home with an FHA loan is about $9,800, which is slated to jump under the recently passed Housing and Economic Recovery Act of 2008 on October 1 to $11,480. And this doesn't include closing costs!

I'd say at least one third of the new first-time home buyers I work with lately have had to tap the bank of mom and dad for resources to buy a home. Fortunately, tax laws say each parent can gift up to $12,000 to each family member without paying a gift tax. So, a couple could theoretically receive $48,000 to help them buy a home (but please verify this with a tax accountant) . . . read more about Asking Parents for Money.

More Articles by Elizabeth Weintraub:

• Down Payment Resources
  
• Protecting Your Good Faith Deposit
  
• Home Buying Before the Wedding

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