Context:
- I just found out that the student loans I’ve been saddled with for the past 19 years were completely avoidable because my parents are wealthier than they ever let on
- Something is wrong with my boomer parents—I don’t understand their relationship with money (or life in general). I think they may be seriously mentally ill
What happened
In 2014, my girlfriend and I moved into a rental home in a big city for about $1,500/month.
She later lost her job and it became unaffordable. The stress ended our relationship.
I struggled to stay in my home for the next seven years, until I finally declared bankruptcy and moved out in 2020.
I spent at least $120,000 on my rental home through those years. All down the drain. I liquidated all $30,000 of my retirement savings to try and stay afloat.
What could have been
2014 was a low point in the housing market. There were HUNDREDS of houses available in the ~$150k range, many of them nicer than the one I rented. All I needed was ~$10k for a down payment, and I could have been paying $800 for a mortgage instead of $1,500 on rent, and all of that money spent would be retained in the form of equity even if I still had to move out. It probably would have saved my relationship too (my parents complain about not having any grandkids, BTW).
What my parents say
When I mentioned this to my parents recently, they just said “we had no idea you wanted to buy a house”. NO, I JUST LOVED PAYING MONEY TO A LAND LEECH! I never even thought to ask for help with a down payment, because we were “broke”. My dad gave us grief over every dollar we spent. We never ONCE took a family vacation.
The truth
Today, my parents have $2 million in retirement savings, and no mortgage or car payments. They live in a rural area with a rock bottom cost-of-living. In 2003, they had HALF A MILLION dollars in cash, entirely separate from their retirement plans.
A 10k loan (out of 500k liquidity the parents had at the time) for a down payment would have made no difference to the parents. OP stated the monthly payment would have gone from 1500 for rent to 800 for the mortgage. With no interest, that surplus of 700 a month would have paid back such a loan in under 15 months, long before the parents would have needed the money for anything.
Edit: a gift also would not have likely made a difference, but I’m using the loan as an example because we can know with 100% certainty that it would not have affected the parents’ financial security at all.
Exactly! Thank you.
They also could have purchased the home for themselves as an investment[1], and rented it out to me for the price of the mortgage. I know people with families who did just that. It would have been a win-win.
I’m not saying they should have become landlords (heaven forbid)
, but they could have sold it to another buyer when I moved out for a nice profit. Home prices have ~doubled since then. ↩︎