Mortgage Loan to Son and Wife

revgolson · Joined: 09 Dec 2007 Posts: 1 1.41 Dollars($)

I desire to loan my son and his wife money to buy a home. How can I structure the loan? Should I do it privately? Hold the property in my name until the loan is repaid? I am trying to figure out the best way to bless them, but also to do this in a business like manner.

chrisburns · Posted: Sun Dec 09, 2007 6:31 pm Post subject:

Well it all depends on if your son and his wife can qualify for the home on their own or not.

They can use your money for the downpayment, that is not an issue. I think the best thing for them to do would be to see if they can qualify for a home loan in their name with whatever money you are providing them as down payment.

If this doesn't work then you should look at the alternatives such as putting the property in your name and giving them a lease Option or owner financing it to them.

Plan A is much better for everyone. Have them talk to a mortgage broker to get pre-qualified and make sure to tell the broker how much money they are being gifted for their down payment!

Niicss · Posted: Mon Dec 10, 2007 5:39 am Post subject:

Are you putting in the down payment or financing the entire purchase price?

Whatever it is, all the details of the transaction should be kept in writing.

gmakerley · Posted: Mon Dec 10, 2007 10:15 am Post subject:

if you are lending less than the full purchase price, then you need to ensure that they are qualified for a mortgage from a lender.

if, indeed, your funds are to be repaid to you; then you need to take care to prepare a promissory note with all terms and conditions of the loan.

it isn't clear how you wish to proceed. one of the other posters mentioned a gift, but you didn't. be careful how you structure this, as a loan may actually disqualify them from qualifying with a lender.

i agree with Niicss that all details ought to be in writing.

Guest 0.10 Dollars($)

I would have them sign a Promissory Note and Deed of Trust. You can find these forms on the internet. Make sure you record the Deed of Trust in the county where the property is located.

evolovik26 · Posted: Tue Dec 11, 2007 7:13 am Post subject:

Are you looking to lend them the downpayment or the whole mortgage.
Cause in the first case you can do it but it has to be factored into their debt to income ratio and if you want it to be on paper a proper contract for deed must be written up. In second case a contract for deed for the whole ammount should be used. A real estate attourney should be able to help you.

scherzeroni · Joined: 05 Jan 2008 Posts: 51 18.77 Dollars($)

It certainly depends on whether or not you are loaning them the full amount of the home. If so, you have several options. You can do private fianancing and hold a lien just as a lender would.

If you are only giving the down payment it now depends on whether or not they are using those funds as a gift. Depending on their credit they may need to do so. A gift can not repaid according to the lender.

If you are loaning the down payment you can hold a second lien but the lender would need to be aware of that situation.

Your question has the possibility of multiple answers. Please contact someone (or myself) regarding all of your options. Your situation could become very tricky and you want to make sure you choose the best option for you and your family.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.07 Dollars($)

You will want to go through a title company that can handle the transfer of the property in a professional way. You can have them type a note and a mortgage (to place a lien on the property). When they pay you back, you just release the lien.

0.10 Dollars($)

Best way is to either give them the money or let them get their own loan. The family dynamics become very stressful on both ends, its not worth it.

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