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What I learned buying a house with my parents’ help

  • Jared and Monika Rohrer are a millennial couple who recently purchased their first home.
  • When they didn’t have enough savings for a down payment, Jared Rohrer’s parents helped out.
  • For people in similar situations, the couple had some suggestions on how to proceed.

Last year Jared and Monika Rohrer, both 29, decided it was time to buy their first home. Mortgage interest rates were at historic lows, they wanted to build capital and they were expecting their first child. However, a problem stood in their way: while they had savings, they didn’t have enough to cover a down payment.

So they talked to Jared’s parents.

“My grandma passed away recently and my parents owned her house, and when they sold it, they called us and said, ‘Hey, we know you’re thinking of buying a house. We would like to reinvest this money, so what? if we come to an agreement with you?” he told Insider.

The deal was that her parents would provide a 30% down payment for the house and cover closing costs. Jared and Monika would cover the monthly mortgage payment, then when they sold the house later they would split the proceeds with her parents 50-50.

Seeking help from parents to buy a house is a common scenario. A 2020 survey by Loan Depot found that 77% of Millennials and Gen Z homebuyers expected financial help from their parents to buy their first home, and 65% of parents aged 39 and more were ready to provide this help. Typical financial assistance included help with a down payment, co-signing a loan, or paying closing costs.

“We wanted help for several reasons,” Jared Rohrer, who co-founded web development company Really Good Content with his wife, told Insider. “One, the down payment, but two, just to learn how to navigate the whole situation. We wanted some help understanding how the real estate market worked.”

As business owners, Rohrer said they’ve been working to pay off their credit card debt and have prioritized investing extra money in building the business, rather than spending money. saving for a house.

In April 2021, the Rohrers closed their five-bedroom lakeside home in Orlando, Florida, for a sale price of $386,000. Jared Rohrer said he and his father were on the mortgage and had signed a legal agreement, which was required by their lender to outline the structure of the agreement.

“It wasn’t necessarily for accountability because we didn’t trust each other, but more or less, just because the bank wanted it,” he explains.

Rohrer and his wife now live in the house with their six-week-old daughter, Serenity, and their golden retriever, Misha. Her parents live in California, but they recently bought a house across the lake that they plan to turn into an Airbnb rental or live in when they retire.

The monthly mortgage payment of around $1,700 is almost the same as what they paid to rent a much smaller apartment, Rohrer said. Although they have no trouble paying the mortgage, he worries that if something happens and they can’t, it could cause tension.

“We are legally bound,” he said. “They’re also in deep trouble if we can’t pay. So there’s definitely added tension, and if that ever happened, it would be really embarrassing.”

All the extra space is the best part of being a homeowner, Rohrer said, but homeownership also comes with a lot of responsibilities and expenses. Since moving in, he said they’ve used their savings to buy a washer and dryer, install a new air conditioning unit and garden fence, and repair plumbing.

“Everything in total probably ended up costing us around $6,000,” he said. “When you live in apartments, it’s someone else’s building, so they handle all the issues. We’re in charge of everything now.”

Compared to other generations, millennials — ages 22 to 30 — made up a smaller share of homebuyers over the past year at 14%, according to the National Association of Realtors. Many have had to compete with other buyers amid high home prices, while paying off student loans and other debts and saving for a down payment.

So any help young homebuyers can get, Rohrer said, go for it.

“I would say if someone is going to partner with their parents or friends to buy a house, go for it 100% because it’s worth getting the equity,” he said. “We don’t learn how to develop a heritage, how to save in order to be able to buy a house. A lot of people in our age bracket don’t have the income, and they just aren’t taught how to save properly because we have such a spending culture.”

If you’re buying a house with your parents, Rohrer said to be sure you have a legal agreement — no matter how close your relationship is.

“All of a sudden when the money comes in, the dirty sides of people can come out,” Rohrer told Insider. “So I would strongly advise anyone who does, to have an agreement in place that everyone has signed that is legal and binding.”