Use Some of Your Equity To Give Your Children. If you’re a homeowner, chances are you’ve built up a lot of wealth – just by living in your house and watching its value grow over time. And that equity? It’s something that could help change your child’s life.
Since affordability is still a challenge, a lot of first-time buyers are struggling to buy a home in today’s market. Even if they have a stable job and a solid plan, buying can still feel out of reach. But that’s where your equity could make all the difference.
To give you an idea, the average homeowner with a mortgage has $311,000 worth of equity, according to Cotality (formerly CoreLogic). That’s significant. And some parents are using a portion of their equity to help their children become homeowners, too.
According to Bank of America, 49% of buyers between 18 and 26 got money from their parents to use toward their down payment (see chart below):
Even though the data doesn’t specify how many parents used their equity, the wealth they’ve built through homeownership may have helped make it possible – especially given how much equity the average homeowner has today.
And for those parents? It’s a way to turn what they’ve built into something deeply meaningful.
This isn’t just about money. For many homeowners, it’s about being the reason their child gets to say, “we got the house.” And giving them the kind of head start they might’ve only dreamed of at their age. And here’s the part that really sticks. Compare the Market says:
“Of those who did receive monetary aid from parents and grandparents to buy a house, 45% of Americans said they would not have been able to purchase a house without financial support from parents and grandparents.”