My Parents Offered to Help Buy My Home ~ What Does Dave Think???

December 11, 2018

 

Dear Dave,

I’m debt-free, and I’m currently putting lots of money toward retirement.

Now, I want to go back to school and get an MBA.

I could pay for school with cash, but that would delay buying a home.

My parents have offered to help out financially, so do you think I should accept their offer? 

Isaac

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Dear Isaac,

I don’t have a problem with this, if they’re doing well enough financially to afford it, and the help comes in the form of a gift.

If they’re borrowing the money to make it happen, then the answer is “no.”

If they want to loan you the money, the answer is “no.”

A loan between family members, or even friends, isn’t help—it’s a trap for both parties.

But hey, if they’re in good enough shape to gift you some money to help with the MBA or a home, that would be an incredibly generous thing to do.

I think it’s so cool when people work hard, make smart decisions, and manage their money well to the point they can do things like this for others.

It sounds like you’re in a really good place, Isaac.

Pay cash for school, and if you can’t buy a home outright when the time comes, make a down payment of at least 20 percent.

That way, you’ll avoid having to pay private mortgage insurance!

—Dave