We hear from friends and neighbours about their fears that their child will never be able to live in this expensive city. But, getting a head start can really help your child down the road. It’s almost impossible to save up enough each year to keep up with price increases so maybe this is the time to buy!
- Encourage them to save. Your child will need at least 5% down payment plus closing costs. In the last few weeks, the average downtown 1 bedroom sold for $425,000 so that’s a down payment of $21,250. Add to that about $7,000 in closing costs (Mortgage Insurance Tax, Land Transfer Tax, legal fees, moving costs).
- Help them financially. Never before have we seen more “Bank of Mom and Dad” help! While your children are in their 20’s and 30’s their budget is much more strained. Can you help them out with their down payment? Supplement their monthly mortgage payments or maintenance fees? Help them with closing costs? Teaching them fiscal responsibility might also be part of your plan so maybe you will want to decide on some limits.
- Non-financial help. Offer to help in other ways that are non-financial: help with minor repairs or help out with cleaning on moving day, refer them to your long-time plumber. You’ve probably owned for a long time and know a lot about repairs. Be available for advice. They will be so grateful.
- Communicate. Talk to your child about how much you are willing to help. They’ll be better able to make decisions going forward. Over the years, even with more financial help from parents, we’ve noticed a decline in the actual involvement of parents in selecting a home for their children. We used to, more regularly, tour homes with a big family group.
- Talk to your Estate Planner or accountant about helping your child. They can be a wealth of information to help you make the right decisions for you and your child. You will want to consider options that help you save estate taxes.
If you have any questions about this, and there is SO much more to know, please email us. This niche has become an important part of our business recently; we are receiving so many referrals from past clients for their children so we know it’s on the minds of many.
We can help.
You might also like
MLS Blunders to Watch Out ForWhen you work with a realtor, you are depending on their skill at properly presenting and selling your property. You need to trust the
Sale Leasebacks as a Solution for SeniorsOne of the most difficult things about retirement is being cash-poor but rich in terms of net worth. To anyone who has been paying down a mortgage for
The Complications of Mutual DrivewaysWhen you live in Toronto, mutual driveways are part of many property owners’ daily lives. A mutual driveway is any sort of driveway that is shar
Despite sky-high property prices, millennials still driven to own homes.Most 18-25 year olds see themselves owning a home in the next five years, according to Leger survey and it is no surprise. Most baby boomers were owne