Gift of Equity: Help Your Child Become a Homeowner 

Owning a home is a legacy. Helping your child buy one? That’s a gift that lasts for generations.

If you’ve built equity in your home over the years, you may be in a position to do something powerful—use that gift of equity to support your child’s journey into homeownership. At Pilgrim Mortgage, we work with families every day who are navigating how to turn financial growth into real-world opportunity for the next generation.

Here’s how it works—and how to make it work for you.

What Is Home Equity, and How Can It Help?

The gift of equity in your home is the difference between your home’s market value and what you still owe on your mortgage. It grows over time as you pay down your loan and as your home appreciates in value.

If you’ve owned your home for several years, there’s a good chance you’ve built up significant equity—equity that can be tapped or transferred to help your children with a down payment or closing costs on their first home.

Using Equity as a Financial Gift

One way parents support their children is through what’s called a gift of equity. This involves either:

• Selling your home to your child below market value, with the price difference considered a gift, or
• Tapping into your home’s equity via a refinance or cash-out option to provide funds for their home purchase

Both options come with important considerations, including lender documentation and potential tax implications—but they can also create life-changing opportunities for your children without taking on new debt themselves.

What to Know Before You Make a Move

Before you take the next step, keep the following in mind:

• Documentation matters. If you’re giving equity as a gift, most lenders will require a signed gift letter that confirms no repayment is expected.
• Taxes may apply. Some equity transfers can trigger gift tax reporting. A financial advisor or tax pro can help clarify what applies to your situation.
• Timing is important. If you’re planning to use a refinance or cash-out option to fund the gift, talk with your lender early to ensure you’re aligned with your child’s homebuying timeline.

How Pilgrim Mortgage Supports Families Like Yours

This isn’t just about dollars—it’s about building a foundation for your family’s future. Whether you’re gifting equity, planning ahead, or exploring options, Pilgrim Mortgage is here to guide you every step of the way.

We help you:

• Understand your equity position and financing options
• Navigate the documentation process with confidence
• Align your strategy with your child’s homebuying goals

Let’s Make Homeownership a Family Legacy

Helping your child buy their first home may feel overwhelming—but with the right support, it can be a smooth and meaningful process. At Pilgrim Mortgage, we’re proud to help families build futures together.