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How to Help Your Kids Buy A Home

Passing down generational wealth

How to Help Your Kids Buy a Home: Gifting vs. Co-signing


Buying a home is a significant milestone for anyone, and with affordability becoming a bigger challenge every day, many parents want to help their kids get into their first home. There are two common ways parents assist their kids in purchasing a home: by gifting them the down payment or by co-signing on the mortgage. Both methods have their pros and cons. Let’s break it down.

Gifted Down Payment

Gifting the Down Payment




  • No strings attached: When you gift the down payment, you’re giving your children a financial boost without expecting anything in return.
  • Easier qualification: Lenders may view gifted funds favorably, especially if they’re used for the down payment, as it reduces the loan amount and the risk for the lender.
  • No Liability: You are not on the mortgage, so it won’t show up on your credit report or effect your ability to purchase another home yourself.




  • No control over the property: You will not be an owner of the home and you will not be on title.
  • Impact on your finances: Gifting a large sum of money could affect your financial stability, especially in retirement.


As a parent who has gifted a significant sum, you may wish to protect your investment somehow. One way is to register a lien on title after possession. You can file this at the land titles yourself or have a lawyer do it for you. You can easily remove the lien in the future when it’s no longer needed.


Co-signing on the Mortgage

Co-Sign a Mortgage



  • Helps with qualification: If your children have a limited credit history or income, co-signing can help them qualify for a mortgage.
  • May lead to better loan terms: With a co-signer, your children may qualify for a lower interest rate or higher loan amount.
  • Control over the property: As a co-signer, you have a legal interest in the property and may have more control over its use.




  • Shared responsibility: As a co-signer or guarantor, you’re equally responsible for the mortgage payments. If your children default, it could negatively impact your credit score.
  • Limits on future borrowing: Co-signing on a mortgage could limit your ability to borrow for your own needs, as it increases your debt-to-income ratio.
  • Strained relationships: Money can sometimes strain relationships, and disagreements over the mortgage or property could lead to tension between you and your children.


Deciding whether to gift the down payment or co-sign on the mortgage depends on your financial situation, relationship with your children, and personal preferences. It’s important to consider the long-term implications of each option and to have open and honest discussions with your children about your intentions and expectations. Consulting with a financial advisor and/or an attorney can also help you make the best decision for your family.


Your first call for all mortgage related questions should always be your Advanced Mortgage professional. Give us a ring today and we can “make cents of your mortgage!”