No. of Recommendations: 6
have also considered cash gifts for down payment on first house. could make a difference to the 'when" and they could get a {slightly) lower mortgage rate, and get "first time buyer " breaks in the UK... any thoughts on this ? when I am gone, the house will be fully theirs anyway...
There have been many discussions & debates about this & similarly about cash gifts in general.
It very much depends on the person -- them, not you.
For example: We once had both our cars break down at the same time, needed $1000 to fix, and we had three toddlers and NO, ZERO, NADA money. We had to call my Mom and ask for a loan. We paid her back a few months later.
Years later she said to me, "You were the only one of you kids that ever paid back a loan. All your siblings just kept the money and never paid me back."
A person who gets as a gift the down payment for a house has no skin in the game. There's a saying "No one washes a rented car." There are sadly many stories of people who were gifted a down payment on house or a car and didn't take care of it.
It also robs them of the dignity of ownership, as they didn't contribute any of their own hard-won effort.
What I did in a similar situation (with nieces & nephews) was offering to match their down payment. If they came up with $10,000 I would put up $10,000 so they'd have a $20,000 down payment.
Once, had the title company officer call me to verify the deal, and I wired the money directly to the title company. Don't give it to them, it goes directly to the closing agent, same way as the mortgage lender wires the money to the closer and not to the borrower.
