Should parents help a family member pay for a new home? Financially and emotionally, it can be a great investment - but at what price?
Getting a mortgage can be difficult in perfect economic conditions, but trying to gather enough money to buy that new home can be quite the challenge when banks have tightened lending standards.
"If the child is going to the parent in the first place (for a loan), it's often because they don't qualify with a bank," says Barbara Corcoran, TODAY's real estate expert. "If they don't qualify with a bank, there's a reason for that. The parent is assuming a great deal of financial risk."
What happens if the new homeowner cannot cover the monthly mortgage? The parent is on the hook.
The key is whether the individual can afford the loan and repay it on time, Barbara says.
There is some great advice and background info to think about from Barbara. The video says it all.
Real estate expert Barbara Corcoran offers advice on co-signing a loan or lending money to family members to pay for a home.