Gift Funds, Gift of Equity Q: I have been considering a gift of equity for my daughter, but do not know what steps to follow. I am also not aware of any extra costs to me. What is your general advice?
View Answer Q: How does a ‘Gift of Equity’ work? For example: house worth $200,000; buyer wants to pay Parents $150,000 but doesn’t want to put anything down and doesn’t want to pay mortgage insurance and wants a good interest rate. If Parents give him a Gift of Equity of $50,000, doesn’t this mean the sale price is actually $200,000? What happens with the mortgage and their tax situation?
View Answer Q: My son wants to buy my home with a gift of equity. I don't understand what that means to me - am I getting less money for my house? Do I pay taxes on my gift? I hope you can help me.
View Answer Q: My brother is about to sell me his house and would like to give me $40,000 as a gift of equity. The house is worth about $250,000. My question is, is there any tax that either of us will have to pay?
View Answer Q: What do you think about 'reverse amortization' or 'negative amortization'? I've always thought these were bad. My son just bought a condo, which he plans to sell in a couple of years.
View Answer Q: My wife and I purchased a home, with my mother co-borrowing on the mortgage, then my wife and I divorced. I now own 25%, my ex 25% per the divorce decree and my mother 50%. We want to sell the home to my daughter. They want their equity from it, but I want to gift my daughter my 25%. Can I do this?
View Answer Q: I am trying to buy my grandfather's house (it was deeded to my parents and uncle upon his death). I am low income so I qualify for down payment assistance through my city. The city will pay 30% of the sales price or the appraised value, whichever is less. The house will most likely appraise above $300,000; however, we are setting the sales price at $300,000. The city would then pay $90,000. I am incapable of taking a loan for the remaining $210,000, but I can handle a loan of $75,000. So my parents and uncle would like to give a gift of equity for the remaining $135,000. My question is, can this be done?
I have spoken to a senior loan officer who has told me that the gift of equity has to be taken off the top of the value (300,000), the true and declared sales price would be the remainder. This would mean that I would not get the 90,000 from the city, but instead a lower amount based on this new sales price. Is this in fact the truth of the matter?
View Answer Q: I just got married and my husband's mother wants to sell us her secondary home, she won't have use for anymore. It is expected to appraise at $240,000, but she only wants us to pay her $175,000. Her job is relocating so she wants the dollars to pay off her balance on this home, and make a large down payment on the new secondary home that will be closer to her new job location. The rest is a wedding gift.”
My credit is ok, but my husband's, her son, is not. He had a heart attack a few years back, when he had no insurance. He has no credit score. It only shows N/A, but lists several doctor's bills that total close to $100,000. He wants to declare bankruptcy and was told that because of that he shouldn't be on the title. Due to his credit situation, he also couldn't be on the mortgage. Will the gift of equity still apply, even though I am not a blood relative?
View Answer Q: My wife & I filed for bankruptcy 4 yrs ago. We are trying to buy the home owned by my wife’s grandmother where we have been living for the past 3yrs. We want to use a Gift of Equity program that allows us to have a low monthly payment. Our credit scores are in the low 700 range. The house needs major improvements and we cannot afford to pay a mortgage plus do improvements.
My question is would it be easier if she just signs over the house to us and we do an equity loan? The house only has 100k left on the current loan. The problem is we can't afford what we are currently being offered (30 yr 7.15% rate, monthly payment of $2,200); our max is $1800-1900. Do I need to wait until my scores get better or is there something I can do? Signed, Desperate to buy the home now..!!
View Answer Q: My son owns a home that he can no longer afford. We were talking about a gift of equity, and I would take over the house. I have a low credit score. What would be the best LTV loans I could get? Any other suggestions?
View Answer Q: I just got married and my husband's mother wants to sell us her secondary home she won't have use for anymore. It is expected to appraise at $240,000, but she only wants us to pay her $175,000. Her job is relocating so she wants the dollars to pay off her balance on this home and make a large down payment on the new secondary home that will be closer to her new job location. The rest is a wedding gift.
My credit is OK, but my husband's, her son, is not. He had a heart attack a few years back, when he had no insurance. He has no credit score. It only shows N/A, but lists several doctor's bills that total close to $100,000. He wants to declare Bankruptcy and was told that because of that he shouldn't be on the title. Due to his credit situation, he also couldn't be on the mortgage. Will the gift of equity still apply, even though I am not a blood relative?
View Answer Q: My daughter's guy's father is trying to sell them a house in Florida. He wants $190,000 for the house and wants to give them $15,000 for the down payment having them get a loan for $175,000 and avoiding the pmi situation? Is the only option for this a gift equity loan?
View Answer Q: My husband and I currently live in my brother-in-law's house. We've lived here for 6 years paying him rent. We now would like to buy it. He only wants what he owes on it, so he's selling it to us for 60,000 and it was appraised for $126,000. The rest, the mortgage company is calling a gift of equity, which is the type of loan they are trying to get for us. I just want to know if this affects my brother-in-law in any way. I don't want him to have to dish out money for anything or lose out in any way. What exactly happens here?
View Answer Q: My husband and I are purchasing a new house. The purchase price is $150,000. We are using a gift of equity to make our 20% down payment, as the house is valued over $200,000. What we're not sure if this is the amount that we are actually financing. It seems like it would be the $200,000; but we understood it from our lender to be $150,000. We very confused... please advise! Thank You!
View Answer Q: My boyfriend and I are trying to take out a mortgage on a house and they said I don’t have enough credit. They said that I would be on the title and that was it, but we are having a little trouble funding the money for the down payment. I asked my family for the money because his family is unable to help, and I was told that I could not use the money from my family that it had to be from one of his blood related family members. Why does it matter where the money comes from? Why can't my family help?
View Answer Q: My grandmother has a summer house (not her primary residence) in NC that she would like to sell to my sisters and myself to ensure that the property stays in our family. My two sisters also live in NC while I live in CT. I have two questions: 1) We are all 3 married, but would like the property to pass from ourselves to our children rather than to our husbands in the event of death. 2) The condo unofficially appraised for $900K - $1M, but was purchased for $20K. The price that we are paying to purchase the property is $150K. We would like to understand more about the tax implications of her Gift of Equity (which I understand to be the difference between the appraised value and our purchase price?) as well as the capital gains taxes. How do we structure the purchase to pay the least amount of gift taxes and capital gains taxes?
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