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  1. #1
    beckett014 is offline Junior Member
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    Parents buying a house for me

    What is the name of your state (only U.S. law)? Iowa

    I am purchasing a house. My parents want to help me. They have offered to pay for the house (they have the means to do this).

    They want to purchase the property in their name then have me pay them back over 5 years. The house would then be transfered to my name.

    What are the issues with this? Tax consequences? Legal?

    Is it better to purchase the house in my name and have a loan from my parents?

    Thanks.
  2. #2
    tranquility is offline Senior Member
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    It's usually better to reflect reality than to tweek it. Buy your house and give the note and mortgage to your parents. The other way causes you to not really have as powerful as rights as you otherwise could have.
  3. #3
    startedone is offline Member
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    Quote Originally Posted by beckett014 View Post
    Is it better to purchase the house in my name and have a loan from my parents?

    Thanks.
    Better for you; not your parents. You don't have to take their deal.
  4. #4
    nextwife is offline Senior Member
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    Why not have them purchase it, then you buy it from them, and have them take back a mortgage (recorded) which protects their interest as a creditor, yet gives you the benefits and rights as an owner.
  5. #5
    startedone is offline Member
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    This year, house prices are expected to drop (alot!) so, financially speaking, its better to rent than to buy until housing market gets better.
  6. #6
    xylene is offline Senior Member
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    How are you going to pay back a whole house in 5 years?

    If you have that kind of means yourself then just buy a house.

    Or do you mean you are only going to repay them a small fraction of what they purchased the house for and they will give you substantial equity?
  7. #7
    FarmerJ is offline Senior Member
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    If they are going to buy it outright and will own it free and clear with no outstanding mortgage to bank then you can talk to a atty about doing a contract for deed, I would say if there is a balloon at the end of the contract that you would have to plan for refi in the 4th yr so that way you have ample time to get a mortgage of your own , other wise a CD can be structured longer than 5 yrs if they will own it free and clear , a atty can draw up contract for deed for you , assist you with what you will need to do to record it.
  8. #8
    beckett014 is offline Junior Member
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    Thanks FarmerJ. Very helpful, I'll look into it.
  9. #9
    bluee is offline Junior Member
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    So its goodness for you, but one thing should keep in mind that the home should not indulge any illegal activity.
  10. #10
    HomeGuru is offline Senior Member
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    Quote Originally Posted by bluee View Post
    So its goodness for you, but one thing should keep in mind that the home should not indulge any illegal activity.
    **A: yeah, this is not Mexico.

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