Living in house now for almost 3 to 4 years paying 800 rent. Father owns house. During this time or years, I have been fixing credit to be able to buy the house from him. How does my father gift money in the amount of 26k to 32k to buy house that he owns?
The house is not on a note. It is paid for full.
He carries the note for the amount you do not finance, then each year he forgives $13,000 of the note which is not taxable. In 2 to 3 years, he will not be owed anything and you get that much tax free.
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Sunday, November 29th, 2009 at 9:36 am
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October 24th, 2009 at 1:35 pm
He carries the note for the amount you do not finance, then each year he forgives $13,000 of the note which is not taxable. In 2 to 3 years, he will not be owed anything and you get that much tax free.
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October 24th, 2009 at 2:08 pm
And just in case you were wondering, buying a house from dad is NOT eligible for the first time homebuyer credit.
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October 24th, 2009 at 2:31 pm
We’ll assume that the price of the house exceeds the "gift" amount. There are a couple of ways to do this. Dad can sell you the house at a substantial discount from the market value. He can give you funds for a down payment, however -
A lender is going to have an issue with him gifting you that much, seeing as he is the seller in this case. I would go and talk to a loan officer, explain the situation and see what they recommend. There may be ways to structure the deal so that you both get what you want.
I did a deal one time, for example, where mom put the son on title and took herself off, essentially giving him the entire house. We then did a cash-out refinance for the son, since he now owned the house free and clear. This would not have been possible in a case where mom owed money on the house.
Lenders have tightened up on things like this, so you need to speak with someone who knows the loan programs but is also not afraid to get a little creative. Good luck -
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Former mortgage broker