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Terry Nelson, CFP®, ChFC®, CASL, LUTCF®
Olmsted Financial Group
3428 Lakeridge Pl. N.W., Suite 120
Rochester, MN 55901
Phone: 507-281-1262
Cell: 507-250-3967
Fax: 507-281-9131
May/June 2025
A Rope or Quicksand?
With today's home prices, you may be considering helping your child with a down payment for their first home. It's a generous gesture that can be just the pull-up they need. But the decision shouldn't be taken lightly. Without forethought, a financial windfall of this amount might sink some offspring into a hole of bad financial decisions. Here are some things to think about:
Their Financial Readiness
Is your child financially prepared for homeownership? It's not just about the down payment. They need to be able to manage monthly mortgage payments, property taxes, insurance, and maintenance costs. You might want to have a heart-toheart about their financial habits.Structuring the Agreement
Consider how to structure the agreement. Will it be a gift, or are you expecting repayments? How your agreement is structured can help ensure your financial assistance doesn't lead to complications later.You'll want to consult a trusted financial advisor or attorney to work out an approach that aligns with your intentions and keeps things clear between you and your child. And ask about possible tax implications.
Finally, keep communication open. Buying a home is a big decision, and your child should feel comfortable discussing everything from budget constraints to future plans with you.
Securities and Advisory services offered through Geneos Wealth Management, Inc. Member FINRA/SIPC.
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