Helping Your Child Buy a Home? Start Planning Early With a UTMA
With rising home prices, tight inventory, and high interest rates, buying a first home has become one of the biggest financial hurdles facing the next generation. For many parents, the question isn’t whether to help - it’s how.
A recent JPMorgan article highlights the increasing role parents play in helping their children buy homes. Whether it’s offering a down payment, co-signing a loan, or even setting up a trust, families are getting creative to support homeownership goals.
But what if you could start preparing long before your child is even house hunting?
That’s where a UTMA (Uniform Transfers to Minors Act) account can make all the difference.
Why Start Early With a UTMA?
UTMA accounts are custodial investment accounts that let parents or guardians invest on behalf of a minor. When the child reaches the age of majority (typically 18 or 21), the funds become theirs to use - not just for college, but for any purpose that benefits them.
That flexibility is powerful.
Instead of locking savings into education-only plans like 529s, a UTMA gives your child the freedom to use funds toward what they need - including:
- A down payment on a starter home
- Closing costs or furnishing expenses
- Paying off high-interest debt before buying
- Even starting a small business or trade career if homeownership isn’t the first goal
It All Starts With Small Steps
The earlier you start, the more time your child’s investments have to grow. With the power of compounding, even small, regular contributions can become meaningful over time.
By the time they’re ready to buy a home in their 20s or 30s, they could have tens of thousands of dollars to use toward the purchase - without taking on extra debt or relying solely on family help at the last minute.
Support Their Future - On Their Terms
Your child’s future isn’t one-size-fits-all. Saving in a UTMA account keeps their options open, whether they pursue higher education, homeownership, or another path entirely.
💡 Ready to give your child a flexible financial head start? Open a UNest account today and start investing in their future - whatever form it takes.
Don't just take our word for it
Hear what trusted money experts say about why UTMA and UGMA accounts can be a smart way to invest for a child’s future.
There are some tax advantages to using UGMA and UTMA accounts… Since they’re in your child’s name, the accounts will be taxed according to their tax bracket… There are no contribution limits on UGMA and UTMA accounts.
Dave Ramsey
Personal Finance Expert
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Investing for your kid’s future
Dave Ramsey
Personal Finance Expert
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...you could consider opening an account where you can dive deeper with the kids by your side. The easiest way to do so is to open a custodial account, known as an UGMA ... or UTMA ... account.
Jill Schlesinger
Emmy winning Business Analyst
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Straightforward “starter” investing account for kids
JILL SCHLESINGER
Emmy winning Business Analyst
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You can give children money that can accumulate somewhat tax-free over time... I love them (UTMAs) because they were like, trusts that you didn't need lawyers to create.... I think it's one of the better tax breaks around though. I know hunting for tax breaks may not sound very exciting, but that's how you take care of your family.
Jim Cramer
CNBC Host
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Give children money that can accumulate over time
Jim Cramer
CNBC Host
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