Can't Afford a Home on Your Own? Consider Buying One With Your Parents

by Maurie Backman | Updated July 19, 2021 - First published on June 15, 2021

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A mother cooking at the stove with her adult son looking over her shoulder.

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If you can't swing a home on your own income, partnering up with your folks is worth considering.

Despite low mortgage rates, many home buyers have struggled to navigate today's housing market, because there's just not enough inventory. Not only does low inventory mean limited selection, it also means higher demand -- and higher prices. The National Association of Realtors reports that the median price of a home sold in March (not counting new construction) was $329,100, which represents a 17.2% increase from just a year prior.

If you can't swing a home today but don't want to continue renting, there may be an option to consider -- go in on a home with your parents. It's not unheard of to buy a home with a partner, or several partners. And while you could turn to your friends, if you buy with your parents, you make a large financial commitment with people who have already committed their entire lives to you -- and there's some comfort in that.

Here are some pros and cons to consider if you want to take this less-conventional route.

The upside

Buying a home with your parents could benefit you in several ways.

1. More money for a down payment

Buying a home on your own means coming up with a down payment on your own. And with home values on the rise, that's easier said than done. But if you buy a home with your parents, you may together be able to round up enough down payment money for a nicer place than you could swing by yourself.

2. A higher total income to qualify for a mortgage

If your parents have worked for many years, they may be enjoying a comfortable living. If you team up with them to buy a home, you'll enjoy the benefit of having a higher total income to present to a mortgage lender. That could increase your chances of getting approved for a home loan -- at an attractive rate.

3. Help with upkeep

Owning a home means dealing with maintenance regularly and paying for repairs. If you partner up with your parents, you won't have to handle all of those items on your own. Rather, you can in some cases split the physical work with them, as well as the financial burden when things go wrong.

The downside

While buying a home with your parents could work out well, here are some pitfalls to keep on your radar.

1. Tricky living arrangements

Buying a home with your parents doesn't necessarily mean occupying a home with your parents. Your parents may decide to buy a home with you as an investment, and have you occupy that home. But what if your parents want to live under the same roof as you? If you get along well with your parents, then maybe no problem. But if your parents are nosy types, you may find living with them less enjoyable.

2. Fewer options when you sell

When you buy a home on your own, you can sell it whenever you're ready. But when other people also own your home, whether that's parents, a romantic partner, or a friend, you don't get full say regarding when that home gets sold. As part of your purchase, draw up a contract mapping out how you'll handle situations like this, so you can avoid getting lawyers involved if difficult circumstances arise.

3. Less independence

It's often unavoidable -- if you end up living with your parents, it could mean relying on them emotionally, logistically, and financially. On your own, you'd perhaps function more independently. While buying a home with your parents does not guarantee that you'll stunt your personal growth, that potential is there.

Should you buy a home with your parents? Clearly, there are pluses and minuses to going this route. Weigh them carefully when you make your decision.

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