By Avrum D. Lank and Karen Herzog

Jul. 17, 2008 (McClatchy-Tribune News Service delivered by Newstex) -- MILWAUKEE -- Liz Jorgensen moved in with her folks to save enough money to move out again.

Jorgensen, 25 and a high school English teacher in Hartland, Wis., wants to own a home, but "I couldn't afford to live in an apartment and one day buy a house," she said.

After watching her struggle to save while renting with a roommate, it was her parents' idea for her to come back to their home in Waukesha, Wis., Jorgensen said. She's grateful they were welcoming and willing to help.

"I'm making a short-term sacrifice of comfort and space for a long-term goal," she said.

The strategy is being adopted by more families.

In 2006, there were almost 4.6 million boomerang babies -- people 24 to 35 living with their parents -- in the U.S. That was 14.3 percent of all men that age and 8.8 percent of all women, the highest numbers since 1999, according to the U.S. Bureau of the Census. Data isn't yet available for 2007, when the housing market slowed and home lending melted down. While moving back with parents can bring financial gain, it also can be an emotional bust without good planning and constant communication on both sides.

"For most people, this is new ground," said Paula Hogan, a Glendale, Wis., financial planner. "They may get a couple of weeks into the arrangement and say, 'You know, I didn't know it would be like this. You used to be a child and now you are an adult. What time do you come back at night?'"

The arrangement also has its own set of financial complications, starting with whether the adult child pays rent.

Jorgensen does not, but she does pay for cable TV, which her parents did not have before she moved back.

To figure out what works best for their family, adult children need to be open about their finances, said Michael Holloway, owner of Homebuyers Associates, a real estate agency in Milwaukee that represents purchasers.

"If they don't have a goal and they are not saving for something, then I think parents should, as a good practice, charge rent," Holloway said.

Jorgensen has found several techniques to save up for a down payment on her own home.

"It's the little things," she said. "Everywhere I go, I ask if there's a discount for educators."

She has only one credit card. She pays it off every month, and it gives 3 percent back on her graduate student tuition. She earns extra money by coaching track and advising the literary magazine. She's teaching several classes online this summer for two school districts.

Erik Helgestad has found another way to save. He is living with his older brother in the brother's Waukesha condo.

Helgestad said he pays rent to his brother, Mike, but at a below-market rate. That helps Mike, 27, afford his condo mortgage while Erik, 23, saves for a home of his own.

"I save $30 to $40 a week just by cooking dinner, and I bring lunch to work just about every day," said Erik Helgestad, who works in technical system support for a branch of Honeywell. (NYSE:HON)

He also rides a scooter to work, which he figures saves about $5 a day. He even stopped splurging on $5 DVD movies in the bargain bin at Wal-Mart. (NYSE:WMT) "That adds up quickly," he said.

Just saving money isn't enough. A first-time home buyer also needs to understand how he or she will get along financially once the house is bought.

First-time buyers should "test drive a mortgage," said Robert Dignan, president of Cardinal Investment Services Inc. in Wauwatosa, Wis. They can do so by saving an estimated mortgage payment each month for half a year to "see what it is going to do to their budget," he said.

If they can get along with the reduced cash flow, then homeownership is probably feasible.

Building credit also is important in the quest for an affordable home, said Cathy Brown, a real estate broker for Shorewest Realtors in Shorewood, Wis.

"That is one of the key things in getting a loan in today's marketplace," she said. "You need a credit score at least in the 700s."

A gap in rent payments will not have an impact on a credit score, said Kathryn Crumpton, manager of the Consumer Credit Counseling Service in Milwaukee. However, she said, some mortgage lenders might want an explanation, which can be met by a letter from parents explaining what a child contributed to the household during the gap.

The days of buying a home with no money down also are part of the past, Brown added.

Now, buyers need at least 5 percent to put down for an FHA-backed mortgage, and probably at least 10 percent to get a good rate on a conventional loan, she said.

Jorgensen has a goal of saving for a 20 percent down payment.

She is looking to buy a 1,300-square-foot house with two bedrooms, 1.5 baths, a nice yard and a two-car garage for about $200,000.

She wants to save enough extra to cover predictable expenses such as a lawnmower, window treatments and other homeowner necessities. Home maintenance, for instance, can typically cost about 1 percent of the property's value each year, according to Hogan, the financial planner.

So far, Jorgensen has avoided direct contact with brokers because she isn't sure she's ready to buy and wants to take things slowly.

But she is browsing the Internet for available houses.

"I hope I'll have an Oprah 'a-ha' moment when I just know it's the right house," she said.

Until then, her parents are happy to have an adult boarder.

"We enjoy having her here," said her mother, Nancy. "There's so much activity in the house now. We're happy to help her work toward her goal of buying a house."

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