Kids sometimes gift their parents a home.

Some lenders—but not all—will allow adult children to co-sign for their parents on jumbo loans.

Wall Street Journal staffer and jumbo mortgage loan maven Anya Martin looks at the issues, opportunities and challenges involved in lending when adult children are either co-signers, or are providing down payment money as a gift so their parents can purchase a home. Martin notes a few issues worth considering, including probate nuances, the opportunity to reduce the loan amount, and taxes on the additional property as an investment. She writes:

If the child already owns a home, the lender may consider the new property to be a second or investment home, meaning a slightly higher interest rate.

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