Buying a Home With Family: How Multigenerational Living Works
Home Buyers

Multigenerational Home Buying: What Families Need to Know Before They Start

For a long time, multigenerational living had a reputation problem. It was the option families turned to when something had gone wrong — a job loss, a divorce, a health crisis. Moving back in with your parents, or having your parents move in with you, meant something hadn’t worked out.

That story has changed pretty significantly.

Today, families are choosing this arrangement on purpose — not as a fallback, but as a deliberate decision to share costs, stay connected, and build something that actually works for how their lives are structured right now.

According to NAR, 14% of buyers recently purchased a multigenerational home, and the year before that hit 17%. [1] These aren’t people making the best of a bad situation. They’re rethinking what “home” needs to do.

If this is something you’re considering — or something a family member has brought up — here’s what’s worth knowing before you start the search.

TL;DR

Multigenerational home buying is on the rise, driven by caregiving needs, rising costs, and remote work flexibility.

Success comes down to three things: finding a property with genuine privacy and long-term adaptability, understanding the financial and legal structure before closing, and having honest family conversations about shared expectations — including the what-ifs.

When all three are in place, it can work very well.

Why More Families Are Going This Route

The honest answer is: it’s rarely just one thing.

For most families, cost is somewhere in the mix. Buying together means more income earners on the loan, more people splitting the mortgage, and a monthly payment that’s easier to justify. But if you talk to families who’ve actually done it, the financial piece rarely tells the whole story.

Caregiving comes up constantly. Nearly half of multigenerational buyers in NAR’s research cited caring for or wanting to be near aging parents as a primary reason for the purchase. [1][4] For older millennials in particular, aging-parent health and caretaking responsibilities were a major driver. That’s not a trend that’s going away — there are now more than 70 million Americans age 65 or older, and the question of how families want to handle that isn’t one most people want to outsource entirely. [2]

Remote work has also quietly changed the math. When you’re not tethered to an office, living near family becomes less of a sacrifice. You can be close without it costing you professionally, which is a relatively new dynamic. [3]

And then there’s the harder-to-quantify stuff — the daily support, the shared routines, the sense that you’re not navigating things alone. For families with young kids, having grandparents nearby can be transformative. For families with aging parents, so can having adult children close.

The point is: if you find yourself drawn to this idea, you’re in good company, and your reasons are probably more layered than just the numbers.

What to Actually Look for in a Property

This is where a lot of families get tripped up. They find a house they love, start imagining how it could work, and convince themselves the layout is more flexible than it really is. Then six months into living together, they realize what they actually needed was a separate entrance, not just a second bathroom.

The properties that work best for multigenerational living tend to share a few things in common.

They take privacy seriously. Not just in theory, but in the layout. Dual primary suites, separate entrances, a finished basement with its own sitting area, or a detached guest house — these aren’t luxury features, they’re what make the arrangement actually sustainable. If each household can’t fully decompress, host their own guests, and keep their own rhythm, the togetherness part gets old fast. Home design professionals increasingly flag this as the most important feature to get right, and it’s easy to see why. [5][6]

They’re built — or can be converted — for flexibility. ADUs (accessory dwelling units) have become a serious part of this conversation as more cities loosen zoning restrictions. A detached ADU gives you the ultimate setup: close enough to matter, separate enough to breathe. If an ADU isn’t already in place, it’s worth asking whether the lot and local zoning would allow for one down the road. [5][6]

They work for the long game. Think about where everyone in the arrangement will be in ten or fifteen years. First-floor suites, wider hallways, zero-step entries, and rooms that can adapt as needs change aren’t just nice to have — they’re what make a multigenerational home function well over time rather than just right now. [6][7]

The short version: the best multigenerational properties support both togetherness and independence. If a home checks one but not the other, keep looking.

Is a Multigenerational Home Right for You?

The Conversations Most Families Skip

Here’s the part that tends to get glossed over, because the emotional pull of the idea is strong and the practical details feel like they can wait. They can’t. ⬅️

Start with the financial structure early. If multiple people will be on the loan, everyone needs to understand what that actually means. Co-borrowers can combine income and assets to qualify for more — but they also share legal responsibility for the debt and share in whatever equity the home builds. That’s meaningfully different from being a co-signer, who carries the liability but doesn’t own a piece of the property. Knowing which structure makes sense for your family is a conversation to have with a lender before you fall in love with a house. [8]

Define ownership clearly. There are several ways to structure who owns what — joint tenancy, tenancy in common, shared-equity arrangements — and each one affects what happens if someone wants to sell, refinance, or passes away. Equal contributions don’t automatically mean equal ownership makes sense, and unequal contributions don’t mean anyone is getting a bad deal. But these things need to be spelled out explicitly, not assumed. [8]

Get it in writing. A verbal agreement between family members feels fine when everyone is on the same page. It gets complicated when circumstances change — and circumstances always change eventually. A written agreement that covers shared expenses, maintenance responsibilities, common areas, and how exits would be handled gives everyone protection and, honestly, usually makes the conversations easier because you’ve already had them. [9]

Talk through the “what-ifs” before closing. Job relocations, caregiving shifts, a marriage, someone wanting to sell — these aren’t worst-case scenarios, they’re just life. The way a home is titled can affect everything from Medicaid eligibility to how inheritance plays out. It’s worth a conversation with an estate planning attorney or real estate attorney before you close, not after. [9]

This stuff isn’t fun to work through. But families who do it upfront tend to have far smoother experiences than those who assume it’ll all work itself out.

Is This Actually the Right Move?

That depends on a few honest questions.

Is everyone genuinely choosing this, or is someone going along with it? The families who thrive in multigenerational arrangements almost always went in with shared intent — everyone wanted it, everyone understood what they were agreeing to. That’s different from one party tolerating it because the math made sense or because it felt like the easier thing to say yes to.

Are the financial expectations clear and actually fair? Not just the down payment, but ongoing contributions, equity stakes, and what happens if someone needs to exit. These things are much easier to define before the purchase than to renegotiate afterward.

Does everyone have a realistic picture of what shared space feels like day-to-day, long-term? Not on a good weekend when everyone’s happy to be together — but on a random Tuesday when someone’s had a bad day, the kids are loud, and you just want your house to yourself for an hour.

If the answers to those questions are honest and mostly positive, multigenerational living can be genuinely great. The data backs that up. So do plenty of real families who’ve made it work.

The Bottom Line

Guthrie Group Homes - Libby Guthrie, Knoxville Tennessee
Guthrie Group Homes – Libby Guthrie, Knoxville Tennessee

Multigenerational living has moved from fallback plan to deliberate strategy for a growing number of families — and it’s easy to understand why. The financial upside is real, the caregiving benefits are real, and when it’s set up well, the emotional rewards are too.

What makes it work is going in with eyes open: the right property, the right legal structure, and honest conversations before anyone signs anything.

If this is something your family is exploring — or if it’s on the horizon and you’re not sure where to start — that’s exactly the kind of conversation a good agent can help you think through. Getting the strategy right early makes everything that follows a lot smoother.

Reach out anytime — even if you’re just starting to think it through.

Sources

  1. National Association of REALTORS® — Making Extra Room at the Table: Multi-Generational Homes in the United States
    https://www.nar.realtor/blogs/economists-outlook/making-extra-room-at-the-table-multi-generational-homes-in-the-united-states
  2. National Association of REALTORS® — The “Silver Tsunami” in Real Estate Is Here: Are You Ready?
    https://www.nar.realtor/magazine/real-estate-news/the-silver-tsunami-in-real-estate-is-here-are-you-ready
  3. U.S. Census Bureau — New U.S. Census Bureau Data Show Detailed Characteristics of Home-Based Workers
    https://www.census.gov/library/stories/2025/01/work-from-home-inequalities.html
  4. National Association of REALTORS® — One Big Happy Household: How Families and the Data Are Shaping Multigenerational Living
    https://www.nar.realtor/blogs/economists-outlook/one-big-happy-household-how-families-and-the-data-are-shaping-multigenerational-living
  5. Better Homes & Gardens — Multigenerational Living Will Define the Future of Home Design, According to Thumbtack and Redfin
    https://www.bhg.com/thumbtack-redfin-home-design-report-2026-11869197
  6. The House Plan Company — How 2025 Is Redefining Multigenerational Home Design
    https://www.thehouseplancompany.com/blog/how-2025-is-redefining-multigenerational-home-design/
  7. National Association of REALTORS® — All Under One Roof: Trends in Multigenerational Living
    https://www.nar.realtor/magazine/real-estate-news/home-and-design/all-under-one-roof-trends-in-multigenerational-living
  8. The Mortgage Reports — How to Buy a House With Your Parents
    https://themortgagereports.com/77007/buying-a-home-with-parents-or-child
  9. Elder Law Answers — Home Ownership When Parents and Adult Children Live Together
    https://www.elderlawanswers.com/what-are-the-house-ownership-options-when-parents-and-adult-children-live-together-14484

 

 

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5 Roadblocks to Affordable Homeownership
Home Buyers

5 Roadblocks to Affordable Homeownership (and Ways to Move Past Them)

Dreaming of a new home but feeling priced out? You’re not alone! According to a recent survey by Bankrate, 78% of aspiring homebuyers cite affordability issues as their primary deterrent.1

According to data from the U.S. Census Bureau, home prices have risen around 32% since the pandemic, and elevated mortgage rates have caused monthly payments to balloon.2

Despite the challenges, homeownership remains a top goal for many Americans. Fortunately, there are ways to turn your dreams of homeownership into reality!

In this guide, we’ll explore five common roadblocks to affordable homeownership and actionable solutions to help you overcome them. Let’s break down those barriers so you can finally get the home of your dreams!

Knoxville Home Affordability Graph

✅ROADBLOCK #1: I Don’t Have Enough Saved For A Down Payment

Many prospective buyers believe they need a 20% down payment to buy a home. But in reality, most conventional loans require just 3-5%. And, for buyers who qualify, there are a number of programs and mortgage options that can make a home purchase more accessible.

Down Payment Assistance Programs (DPAs)

DPAs offer grants, loans, and other financial assistance to help with your down payment and closing costs. Many programs are specifically designed for first-time buyers, but there are also options for repeat homebuyers.3,4

These programs can significantly reduce the upfront costs of buying a home. We can help you find down payment assistance programs. Contact us to find out if you may qualify!

0% Down Government-Backed Mortgages

If you qualify for certain government-backed mortgages, you may not need to come up with a down payment at all.5

While these loans, offered by the Department of Veterans Affairs (VA) and the United States Department of Agriculture (USDA), are not available to all buyers, they offer numerous benefits, including competitive rates and no down payment requirement.

  • VA loans are available to U.S. military members, including veterans and surviving spouses.6 They do not require a down payment, though the buyer must pay a fee at closing.
  • USDA loans are available to moderate to low-income buyers in certain rural areas.7 They do not require a down payment.

Family Gifts

Did you know that 25% of first-time buyers in 2024 reported receiving down payment gifts or loans from family members or friends?8 In fact, a growing number of Baby Boomers are choosing to gift all or a portion of their heirs’ inheritance before they pass away.9

Some financial advisors even recommend this as part of their client’s estate plan. Just be sure to follow the proper procedures to document these types of gifts, if you’re fortunate enough to receive them.10

Existing Home Equity

Due to record-high real estate gains over the past few years, if you already own a home, you may have more equity than you realize.11 This equity (or difference between your home’s current value and what you owe on your mortgage) could go toward a down payment on a new property.

Wondering how much equity you have in your current home? Reach out for a free home value assessment.

✅ROADBLOCK #2: I Can’t Afford the Monthly Payment

Worried about those monthly mortgage payments? High interest rates and rising costs can make mortgage payments feel daunting. But there are strategies to reduce your monthly burden.

Explore Alternative Mortgage Terms

The traditional 30-year fixed-rate mortgage isn’t the only kind of loan out there. Options like adjustable-rate mortgages (ARMs) or hybrid mortgages can offer lower initial rates.12, 13

Some buyers opt for these if they plan to sell the home before the initial rate term ends or refinance down the road. A lower mortgage rate can significantly lower your monthly payment. However, it’s important to understand the risks involved so you can weigh the pros and cons before deciding.

Consider Discount Points

Buying discount points—a process also known as a permanent rate buy-down—is another great way to limit your monthly costs.14 Essentially, this strategy involves prepaying a fee to lower your interest rate across the life of your loan.

If a seller is especially motivated, they may be willing to pay for discount points for the buyer to close the deal on a home. In some cases, we can help you negotiate these types of seller concessions.

Ask About Seller Financing or an Assumable Mortgage

Here are two less common options you might not have considered:15

  • Seller Financing – The seller acts as the bank, offering you potentially better terms than a traditional mortgage.
  • Assumable Mortgage – You take over the seller’s existing mortgage with a lower interest rate than what’s currently offered by lenders.

Note that these options may or may not be possible for you depending on the seller, the home, and the type of mortgage, but they are worth exploring—and we can help.

Co-Buy with Family or Friends

A growing number of homebuyers are returning to multigenerational living or are even buying a home with friends.16 This arrangement enables you to cut costs significantly while sharing both the time and financial responsibilities of homeownership.

We can help you search for homes that are well suited for your group.

Purchase a Home with Income Potential

You can generate extra income to offset your mortgage payments by purchasing a duplex, renting out a room or an accessory dwelling unit (like a garage apartment), or even listing your property on Airbnb.

We work with investors and can help you find a property to meet your goals.

✅ROADBLOCK #3: I Can’t Qualify for a Mortgage

Qualifying for a mortgage can be a stressful process, especially if you have previously faced financial challenges. But you might be pleasantly surprised—there’s a lot you can do to improve your chances of success.

Boost Your Credit Score

Your credit score is foundational when it comes to getting a mortgage.17 A higher score typically means a lower interest rate and more options. Take steps to improve your credit by paying bills on time, reducing debt, and checking your credit report for errors.

Even a small improvement in your score can make a big difference.

Pro tip: Avoid opening or closing credit cards or taking out other loans (like car or personal loans) if you plan to start home shopping in the near future.

Lower Your Debt-to-Income Ratio

Lenders want to see that you can comfortably handle your debts. They assess this by calculating your debt-to-income ratio: your total monthly loan payments (including mortgage, car loans, student loans, and credit cards) divided by your gross monthly salary.18

Paying down other types of debt, like your car loan, will leave more space in your budget for a monthly mortgage payment.

Apply for an FHA Loan

FHA loans are designed for buyers with less access to savings, as well as those with lower credit scores.19 Down payments on FHA mortgages can be as low as 3.5% with a credit score of 580 or above, or 10% with a credit score of 500 or above.

Generally, the buyer’s debt-to-income ratio must be below 43%, with no more than 31% of income going to mortgage payments. These loans do come with some additional requirements, such as mortgage insurance (including an upfront premium of 1.75% at closing), a pre-purchase inspection, and borrowing limits that vary based on geographic area.

Consider Getting a Co-Signer

Having a co-signer with a stronger credit history or more income can strengthen your application, but make sure you (and they) understand the risks and responsibilities involved.

✅ROADBLOCK #4: I Can’t Find a Home in My Price Range

Feeling frustrated by the lack of affordable homes on the market? Unfortunately, this is a common problem.20 But with a little flexibility and guidance, it’s possible to find a great property to fit most budgets.

Expand Your Home Search

You may need to search outside your target area. In many markets, home prices vary drastically within the span of miles.21 Being open to exploring alternative neighborhoods or those farther from town can open up surprising possibilities.

As local market experts, we can help you discover hidden gems and up-and-coming neighborhoods. Reach out for a complimentary consultation.

Revisit Your Must-Haves

Take a close look at your “must-have” list. Are there any features you can compromise on to expand your options and find a more affordable property? For example, do you really need two bathrooms, or could you settle for a single bathroom with space to add a second one in the future?

These types of compromises can sometimes shave tens of thousands off your purchase price. We’re happy to offer our thoughts on the features that you’re likely to find within your budget.

Consider Fixer-Uppers

Looking to cut purchase costs? Don’t shy away from homes that need a little TLC.22 Fixer-uppers usually come with a lower price tag, and you can personalize the renovations to your taste. Just be sure to factor in the cost of repairs and renovations when determining your budget—and to be realistic about your own home repair skills!

If you’re interested in exploring fixer-upper opportunities, we can help you identify properties with potential and connect you with reliable contractors.

✅ROADBLOCK #5: I’m Overwhelmed by the Process

Buying a home can feel like navigating a maze. Between searching for properties, securing financing, negotiating contracts, and handling paperwork, the process can quickly become overwhelming.

But you don’t have to do it alone! We can simplify every step, helping you stay organized, informed, and confident in your decisions. Let us do the heavy lifting, call us today.

Find the Right Home Faster

The sheer number of listings on the market can be daunting, and homes that meet your criteria may not always be easy to find. Our team can:

  • Save you time by narrowing down homes that fit your budget, needs, and lifestyle.
  • Get you access to off-market and pre-listing properties that aren’t widely advertised.
  • Provide insights on local market trends to help you make a competitive offer.

Navigate Financing & Paperwork With Ease

Real estate transactions involve complex contracts, legal documents, and lender requirements. One misstep could delay your purchase—or even cost you your dream home. We will:

  • Help you find down payment assistance or grants that you may not be aware of.
  • Explain mortgage options and connect you with reputable lenders.
  • Ensure all purchase documents are accurate and deadlines are met.

Score the Best Deal

Many buyers worry about overpaying for a home or getting stuck with costly repairs, but we know how to:

  • Use expert negotiation tactics to secure the best possible price.
  • Identify hidden costs so you aren’t caught off guard at closing.
  • Negotiate repairs or seller concessions to save you money.

Streamline Inspections & Closing

The home inspection and closing process can bring last-minute surprises. We avoid these by:

  • Helping you interpret inspection reports and advising on necessary repairs.
  • Coordinating with lenders, appraisers, and title companies to keep everything on track.
  • Preparing you for closing day so you know exactly what to expect.

Benefit From Ongoing Support

Our relationship doesn’t end once you get the keys. We always go the extra mile to:

  • Recommend trusted contractors for renovations and repairs.
  • Help you make strategic upgrades through complimentary real estate consultations.
  • Provide market updates in case you want to refinance or sell later.

The bottom line? You don’t have to navigate this process alone. When you work with us, you’ll have a trusted partner to handle the complexities, answer your questions, and ensure everything goes smoothly from start to finish.

✅Let’s Turn Roadblocks Into Stepping Stones Toward Your Dream Home

Ken and Libby Guthrie, Guthrie Group Homes, Knoxville TN Real Estate
Ken and Libby Guthrie, Guthrie Group Homes, Knoxville TN Real Estate

Buying a home may come with challenges, but none of them are impossible to overcome. With the right strategies, resources, and expert guidance, you can navigate these obstacles with ease.

Whether you’re worried about saving for a down payment, qualifying for a mortgage, or finding the right home in your price range, there are solutions available to help you move forward. The key is to stay informed, explore all your options, and work with professionals who can guide you every step of the way.

Our team is here to help you find the right home, secure the best financing, and negotiate the best deal—without the stress and uncertainty of doing it all yourself. Let’s turn your homeownership dreams into reality. Contact us today to get started!

Karen Bomagat Testimonial for Guthrie Group Homes Knoxville

The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

SOURCES:
1. Bankrate – https://www.bankrate.com/mortgages/home-affordability-report/#unaffordability
2. Nerdwallet – https://www.nerdwallet.com/article/mortgages/2025-home-buyer-report
3. Bankrate – https://www.bankrate.com/mortgages/first-time-homebuyer-grants/#types
4. Down Payment Resource – https://downpaymentresource.com/
5. Bankrate – https://www.bankrate.com/mortgages/types-of-mortgages/#government-backed
6. Bankrate – https://www.bankrate.com/mortgages/understanding-va-loans/
7. Bankrate – https://www.bankrate.com/mortgages/what-is-a-usda-loan/
8. National Association of Realtors – https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers
9. Business Insider – https://www.businessinsider.com/boomers-not-waiting-pass-inheritance-wealth-transfer-millennials-need-it-2024-7
10. Experian – https://www.experian.com/blogs/ask-experian/down-payment-gift-rules/
11. Bankrate – https://www.bankrate.com/home-equity/homeowner-equity-data-and-statistics/
12. Nerdwallet – https://www.nerdwallet.com/article/mortgages/adjustable-rate-mortgage-arm
13. Lending Tree – https://www.lendingtree.com/home/mortgage/what-is-a-hybrid-mortgage/
14. Investopedia – https://www.investopedia.com/terms/d/discountpoints.asp
15. Lending Tree – https://www.lendingtree.com/home/mortgage/what-to-know-about-owner-financing/
16. National Association of Realtors – https://www.nar.realtor/blogs/economists-outlook/home-for-the-holidays-the-rise-of-multi-generational-home-buying
17. Consumer Financial Protection Bureau – https://www.consumerfinance.gov/consumer-tools/credit-reports-and-scores/
18. Nerdwallet – https://www.nerdwallet.com/article/mortgages/debt-income-ratio-mortgage
19. Bankrate – https://www.bankrate.com/mortgages/what-is-an-fha-loan/#requirements
20. Bankrate – https://www.bankrate.com/real-estate/low-inventory-housing-shortage/
21. Realtor – https://www.realtor.com/advice/buy/priced-out-of-dream-neighborhood-cheaper-alternative/
22. This Old House – https://www.thisoldhouse.com/buying/21017198/buying-a-fixer-upper-house

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Home Buyers

Multigenerational Home Buying: How to Find a Home That Fits Your Whole Family

For many homebuyers, multigenerational living used to be considered an option of last resort: it was a route families took only when they needed to ride out a financial storm or care for ailing family members.

But that mindset is on the decline: A growing number of families now say that they are embracing multigenerational living and moving in together by choice.

In fact, research by the National Association of Realtors (NAR) found that the share of multigenerational home buyers rose to 14% in 2022––close to an all-time high.1

Buyers cite a multitude of reasons for choosing a multigenerational home, including saving money on living expenses, pooling resources, taking care of very young or aging relatives, and spending more time with family.

“Multi-generational home buying is a way for families to care for one another, support one another, and often buy a home that may have been previously out of reach,” writes Deputy Chief Economist Jessica Lautz in a blog post about the trend.1

Living with extended family has become especially popular in recent years as younger generations face higher home costs and seniors embrace aging in place.

According to Pew Research, the number of Americans living in a home with at least two generations of adults has more than quadrupled since the 1970s.2

For many families, the benefits are substantial. Research shows that people who live in [su_tooltip title=”multigeneration” text=”relating to several generations, ‘multigenerational families'” shadow=”yes”]multigenerational homes[/su_tooltip] are healthier and tend to live longer.

They also enjoy more financial security. Plus, research by Pew found that people who live with relatives are more likely than not to say that it has been a positive experience.2,3

That’s not to say that multigenerational living is easy: It can also be stressful––especially if you choose a home that isn’t suited for a larger family.

The key to making it work is to pick a home that can accommodate young and old alike without requiring you to sacrifice comfort or privacy.2,4

Here’s a closer look at multigenerational living, along with tips for finding a home that’s suitable for a diverse group.

What To Consider Before Shopping For A Multigenerational Home

What to consider before buying a Multigenerational Home
What to consider before buying a Multigenerational Home

Before you begin looking for a house, talk with your family about your plans to make sure everyone is in agreement.

Have you hashed out what you’re looking for in a new home? Can you agree on potential compromises? Are there any unaddressed concerns about the move?

You may also find it helpful to articulate your “why” for buying a multigenerational home and how each of you might benefit.

For some families, multigenerational living is all about caring for relatives and sharing responsibilities. But for others, the goal is to pool resources so that you can purchase a more desirable property or cut down on expenses, like childcare or senior living.

For homeowner Jian Huang, she initially bought a multigenerational home to help her aging mother. But she says the purchase also helped her family save a lot of money on expenses––as much as $25,000 to $40,000 a year.

“It makes so much sense financially and emotionally that we would not have it any other way,” commented Huang to Apartment Therapy.5

Besides talking over your short-term wants and needs, you’ll also want to weigh long-term issues that could crop up in the future, like accessibility or money concerns. For example, if some family members are nearing retirement, accessibility issues (such as extra-steep stairs or a narrow hallway) could become a problem over time.

Similarly, a more luxurious home with extra amenities like a pool may appeal to buyers who have gathered a lot of cash upfront, but it may also require a bigger long-term budget for maintenance and supplies.

If you haven’t had these discussions yet, set a date in your calendar so that you can talk it over as a group. We can help by interviewing family members individually and advising you on what you can realistically find in today’s housing market.

What To Look For In A Multigenerational Home

Once you’ve settled on what you want and need from a new home, your next step should be to jointly draft a budget so that you’ll know what you can afford.

To ensure that no one in your family gets accidentally overextended, think holistically when planning your new housing budget and determine what you would need to buy the home––and maintain it.

In addition to budget, you’ll also want to consider a home’s size and what kind of layout you might need. In general, homes that offer ample space for solitude and privacy are thought to be more practical for multigenerational living––especially if there will also be young children.4

However, the ideal layout for your family and the amount of square footage you’ll need to be happy long-term will also depend, in part, on family members’ personalities.

Some people don’t mind sharing a bathroom or having bedrooms situated close to one another. But others may find that they need something more separate to relax. Different housing options to consider include:

  • A large home with plenty of rooms and at least one or more ensuite bathrooms.
  • A home with an accessory dwelling unit (ADU), such as a basement apartment, in-law suite, or separate cottage on the property.
  • A multifamily unit, such as a duplex or triplex.

For home buyers looking to age in place, a home that offers a separate ground-floor unit, such as a backyard ADU, could be the most comfortable (and the most practical) option, says author Sheri Koones.

“It’s a way for many older people to avoid having to go into an expensive assisted living or other facility as they age,” said Koones in an interview with Realtor Magazine.6

Another possibility to consider would be a home you could add onto or retrofit into multiple units. However, building a brand-new accessory unit or renovating an existing space can be pricey.

When visiting a property, we’ll help you weigh potential costs and estimate whether it’s a good investment. We can also connect you with a trusted contractor who specializes in renovations.

How To Buy A Multigenerational Home – Mortgage & Financing Options

Mortgage & Financing Options When Buying a Home with Family
Mortgage & Financing Options When Buying a Home with Family

Buying a home with family can be complicated––especially if you plan to jointly apply for a mortgage. However, depending on your financial resources, you may be surprised to find that it’s sometimes easier to qualify for certain mortgages as a group than if you tried to go it alone.7

Talk it over with a mortgage lender or broker and ask for advice on what’s best for your situation. We’d be happy to connect you with a professional who understands the nuances of co-buying.

Technically, there’s no limit to the number of co-borrowers you can have, but some lenders may be more lenient with their lending requirements than others. For example, most conventional lenders will only work with a maximum of four borrowers for a single loan. If you want to buy a home with a larger number of co-borrowers, you may have to look to an alternative lender.7

Your credit will also be an important factor in determining your mortgage qualifications and what you can buy, so have everyone check it as soon as possible.

Pulling your credit reports and scores will not only tell you where you stand. It will also alert you to correctable issues with your credit, such as mistakes on your credit reports or too much debt on your cards.8

As you discuss your homebuying budget and strategy, jointly consider the following:

  • Who will be on the mortgage?
  • What about the title?
  • Would including everyone on the mortgage be beneficial for your mortgage rate?
  • For those who don’t qualify for the mortgage or have a lower credit score, can you make other arrangements so that they can still financially contribute?

Next, consider potential tax and estate planning implications of your home purchase and what might happen if some family members later decide to drop out of the arrangement.9

To ensure you make an informed decision, it’s best to speak with a licensed professional. Ask us for a referral to a legal professional or an accountant who can advise you.

The Bottom Line

Ken and Libby Guthrie, Guthrie Group Homes, Knoxville TN
Ken and Libby Guthrie, Guthrie Group Homes, Knoxville TN

Multigenerational home buying has grown more popular for a reason: it’s a great way to combine resources and buy a supportive home for more than just your immediate family. It can also be a smart lifestyle choice, helping reduce loneliness and promote health and well-being.10

If you’re wondering whether multigenerational living is right for you, call us for a consultation. We’d be happy to walk you through potential options and help you envision your own full house.

The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

Sources:

1. National Association of Realtors – https://www.nar.realtor/blogs/economists-outlook/all-in-the-family-multi-generational-home-buying
2. Pew Research Center – https://www.pewresearch.org/social-trends/2022/03/24/financial-issues-top-the-list-of-reasons-u-s-adults-live-in-multigenerational-homes/
3. SSM – Population Health – https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5769098/
4. Better Homes and Gardens – https://www.bhg.com/what-to-look-for-in-a-multigenerational-home-8409277
5. Apartment Therapy – https://www.apartmenttherapy.com/multigenerational-homes-37412085
6. Realtor Magazine – https://www.nar.realtor/magazine/real-estate-news/home-and-design/all-under-one-roof-trends-in-multigenerational-living
7. Bankrate – https://www.bankrate.com/mortgages/how-many-names-can-be-on-a-mortgage/
8. Experian – https://www.experian.com/blogs/ask-experian/what-credit-score-do-i-need-to-buy-a-house/
9. Kiplinger – https://www.kiplinger.com/retirement/estate-planning-for-multigenerational-living-arrangements
10. Institute for Family Studies – https://ifstudies.org/blog/multigenerational-living-is-it-a-solution-for-our-aging-population

📲 865-364-0200
📧 [email protected]

Libby Guthrie, REALTOR
Keller Williams 865-966-5005
Guthrie Group Homes, Knoxville TN Real Estate

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