20-Year-Old Juggles Mortgage And College – Is Buying A Home For Parents A Wise Move?

A 20-year-old man is grappling with a major life decision: Should he buy a home with his parents or prioritize his future?

The young man, Reddit poster r/RealEstate, has a stable job and good credit. He said he lives with his parents in an apartment. The family wants to buy a home, but it will have to be purchased under the young man's name because his credit is better than theirs. He could get a lower interest rate on the mortgage, which is a little less than $300,000.

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"If we go through with the purchase of the home, I would have to help out more with bills … as they probably would not be able to pay it all themselves," r/RealEstate wrote. "I currently do not pay rent in our apartment, so obviously my savings rate would go down."

While homeownership can offer financial benefits and stability, there are potential drawbacks. By taking on a mortgage at such a young age, the man risks limiting his flexibility to relocate for job opportunities or personal reasons. Additionally, shouldering the financial burden of a mortgage could impact his ability to save for other life goals, such as graduate school or starting a family.

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Although refinancing the home in the future could make the monthly payments more affordable for r/RealEstate's parents, he is concerned that he may not be able to buy a house for himself and his future family if it remains in his name.

"I obviously would not kick my parents out of the home," he said.

Financial experts often advise young adults to focus on building savings and establishing credit before making a significant investment like homeownership. But in some cases, buying a home can be a strategic move. It's essential to weigh the pros and cons carefully and consider long-term financial implications before deciding.

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The post sparked a discussion among Reddit users, who largely advised r/RealEstate against purchasing the house.

"The fact your parents need to put a loan under your name because your credit is better than theirs is an immediate red flag," Great_Celebrations965 wrote. "Aside from that, question yourself if you trust your parents to be so fiscally responsible as to be personally liable for nearly $300K. How are they managing money? Have they been good about paying debts in the past?"

Great_Celebrations warned that your credit score follows you around forever and that failing to pay off a $300,000 debt on time could damage the score, making it difficult to repair.

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Wandering_aimlessly9 shared that it was difficult when they purchased their first home at age 25 after getting a degree.

"You will lose out on a lot of benefits by getting the house now, and what is even worse is that if you decide to buy a house in the future … this current house will MURDER your debt to income ratio," Wandering_aimlessly wrote. "Plus, you have no access to the equity. And if I had to guess … they would want to be on the deed but not on the mortgage. YOU will be responsible for the repairs and such. If they don't do maintenance and upkeep YOU will be the one losing equity and being punished."

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