Can my parents make me a mortgage loan?
June 5, 2014 12:04 PM Subscribe
Trying to buy a house. Have money for a down payment, but I'm self-employed and was turned down for a traditional loan. My parents are willing to lend me the money I'd need for the balance, and have me pay them back with interest, á la a mortgage loan. Is this doable?
posted by toomuchkatherine to Home & Garden (12 answers total)
I've been renting for years, and wanting to buy for years. I know I can swing it financially (have a lot of savings, though not enough to buy a big-enough house outright). But because I am self-employed, particularly because I had a very bad year in 2012, I haven't been able to secure a traditional loan. My parents are willing to lend to me, and I see this as a nice chance to potentially keep that money in the family, instead of having it go to a bank. My question is about whether this could work, and how it would be structured: Would it technically be a large gift to me? Something else? If it's a big gift that comes in a lump, will they/we have to pay gift tax on it? Whom should we be talking to as we structure this? Ideally, it would work out that I am the legal owner of the house, not my parents.
You are not my accountant. (Though if you know of a professional I should talk to, feel free to memail me a recommendation.)