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Helping Mother Out |
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I want to buy my mother's house from her for what she owes on the home. She has been in the house for 8 years so she does have equity built up in the house and in 2001 the house appraised at 88,000 and 2007 it appraised for 127,500. I would like to be able to get loan for $10K more than what she owes so that I can make the repairs to fix, update and sell it. She wants to sell it also but because of her credit she is unable to obtain the funds to make the necessary repairs. What is a good approach of doing this? Also, my husband is very weary of this and doesn't want to get involved unless a realtor can give us some great feedback. He doesn't like to speak about the “what if's”....he likes facts!!! |
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You don't tell me how much is owed on the house. If it's not too much, and if your mother is aged more than 62, she might be able to get a reverse mortgage on the place, building up a gradual debt that doesn't have to be repaid until she dies or moves out. Her credit wouldn't matter, and she'd be free of mortgage payments, with some income to make repairs.
As for you buying the house, your ability to get a mortgage depends on your own credit and income. It's hard these days to get a mortgage for property you're not going to live in. It won't cost you anything to talk with a mortgage broker and find out where you stand.
But if you own the house, when your mother sells it you will owe capital gains tax on her profit. She won't be able to use the homesellers exclusion and neither could you. |
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Edith
Originally published on November 12, 2007 |
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