A mom had some money saved, and her kids asked her to help them buy a house. However, she wanted to own a part of the house in return. The daughter was unhappy about it, but her brother agreed to their mom’s proposal.
A user took the forum to ask Am I wrong to lend my kids money for a downpayment.
OP was not wealthy. She has to work very hard to earn her money. She does earn over $200,000 in an average year.
OP’s kids are out of university and working but are having trouble purchasing their houses, even with government programs, as the housing market is crazy. She says she has substantial savings and tends to blow her money on random toys she wants.
OP also says that as she works hard on her time off, if she feels like restoring old cars for fun, she will.
OP’s KIDS APPROACHED FOR MONEY
OP’s kids approached her about help getting a house. The kids say that if they can go into a purchase with 25% down, they can save on fees and get a better rate.
WHAT DID OP DO
OP thought about it and agreed to lend them the money in return for equity in the purchase. For example, if her daughter buys an $800,000 house and OP lends her $200,000, then OP owns 1/4 of the house. If OP’s daughter sells it for $1,000,000, then OP would get $250,000 back since she would own 1/4 of the equity.
YOU ARE RIDICULOUS
OP’s daughter said OP was being ridiculous, and she is angry at OP for not giving her the money or at least having it be an interest-free loan.
WHAT DID THE OP DO
But OP’s son took up on OP’s offer and bought himself a moderate home. Between a first-time home buyers program, OP’s investment, and OP’s son’s and his partner’s savings, they bought a house for themselves with almost a 50% down payment.
But OP’s daughter was angry with OP for taking advantage of her brother, and her daughter was going to buy a condo she could afford on her own. OP is asking if she is wrong.
IT CAN’T BE BOTH THE WAY
“You are a jerk. You are saying it’s a loan, but then you also say it’s an investment. You can’t have it both ways.
Don’t act like you are lending your kids money when you are just investing in real estate.”
IT IS A GENEROUS OFFER
“I think this is a very fair and generous offer. The kids have a much nicer dwelling than they could afford on their own, with no consequences to them or what they earned and worked for.
If they live in the house forever, the kids keep the house and equity. If not, OP gets a small ROI, and the kids get to choose their next dwelling based on the remaining equity and their ability to acquire financing.
Your daughter wants free money. Your son was grateful for the help.”
YOU HAVE AN ISSUE
“What got me was “I am not rich, but I make 200k a year” and they still have an issue helping their kids out without making a profit.”
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This article was originally published on Mrs. Daaku Studio.