My house, my rules: More parents drawing up mortgage agreements with kids

An increasing number of mothers and fathers are helping out first-time homebuyers

New York /
Jun.June 26, 2015 09:33 AM

Real estate has always been a family business. But some New York City parents are taking things a step further.

An increasing number of mothers and fathers are helping out their offspring by supplying them with mortgages when buying an apartment in the city, according to the New York Daily News.

“Cash is king in this market and that makes it extremely difficult for first-time homebuyers,” Douglas Elliman broker AnneMarie Tamis-Nasello told the newspaper. “It’s the first thing sellers look at. They go right to the all-cash offers.”

The phenomenon, although increasing, isn’t all new. In 2014, roughly 6 percent of first-time home owners received a loan from a family members, according to numbers from the National Association of Realtors cited by the newspaper.

Getting a loan from a traditional bank can take longer than the average time a Manhattan apartment is on the market. Dealing with mom and dad can be a lot quicker.

Issuing a parent-child mortgage doesn’t mean mom and dad are simply gifting their kids apartments. Some give their kids the same rates a bank would have, others will offer up lower interest rates. But often, it is still a win-win situation for the whole family.

“They still get a good return on their money even as they give their kids a competitive rate,” Compass agent Julianne Bond told the newspaper. “The kids are establishing a credit history and getting the same tax benefits they’d get with a regular bank mortgage.” [NYDN] — Claire Moses


Related Articles

arrow_forward_ios
(Image by Wolfgang & Hite via Dezeen)

Hudson Yards megadevelopment inspires a new line of sex toys

Hudson Yards megadevelopment inspires a new line of sex toys
Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio
Wendy Silverstein (Credit: Getty Images)

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out
Ken Fisher of Fisher Brothers and 605 Third Avenue (Fisher Brothers)

JPMorgan, Fisher Bros. land $400M refi on 605 Third

JPMorgan, Fisher Bros. land $400M refi on 605 Third
Ken  Griffin and lots on Star Island Drive (Citadel, Google Maps)

Ken Griffin continues buying spree with $25M Miami Beach parcel

Ken Griffin continues buying spree with $25M Miami Beach parcel
From left: David Bistricer of Clipper Equity, a rendering of the Gramercy Square condominium and Joseph Chetrit (Photos via Clipper Equity, Getty, VUW)

Chetrit, Bistricer’s Gramercy Square condo lands $207M loan

Chetrit, Bistricer’s Gramercy Square condo lands $207M loan
The construction sector added 27,000 jobs in November, according to the latest Department of Labor figures. (iStock)

Amid bleak jobs report, gains in construction and warehousing

Amid bleak jobs report, gains in construction and warehousing
President Donald Trump and 1483 Shore Parkway in Brooklyn (Getty; Google Maps)

Lawsuit targets Trump for “fraudulent” rent overcharge scheme

Lawsuit targets Trump for “fraudulent” rent overcharge scheme
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...