"I work full time and make a good living, and I am already saving enough for retirement. I have a mortgage for my own home, but I can afford to help them by chipping in with the down payment and on the mortgage payments. They will probably contribute about 60 percent ,and I will contribute 40 percent. What's the best way to approach this: Do all our names go on the deed or only theirs?"
"First, if your parents can't qualify for the mortgage on their own, the lender will require a co-signer. That means you're on the hook legally for the entire loan if, for some reason, they stop paying. Co-signing also means that you could have trouble qualifying for your own mortgage in the future, as lenders will subtract the entire monthly payment your parents pay from the amount they'll use to qualify you for a loan."
An adult child can afford to contribute 40 percent toward parents' new home while parents cover 60 percent. Options include co-signing the mortgage or having parents obtain the loan while the child makes payments. Co-signing creates legal liability for the entire loan if parents stop paying and can reduce the child's future mortgage qualification because lenders count the full monthly payment against the child's debt-to-income. Co-signing typically results in being placed on the deed and makes the child responsible for mortgage payments, insurance premiums, and tax bills. The child should decide whether to own the property now or remain a future inheritor.
Read at Slate Magazine
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