Parents/Son Joint Purchase of Home

[Lips78]

My wife and I wish to jointly purchase a home in Massachusetts with our son so that he can begin to build equity in a home rather than throwing money at rent. We would make the down payment, and he would then make 50% or more of the monthly payment with us paying the remainder. What is a good way to structure such a deal from a real estate law perspective and from a mortgage perspective? What is each party's percentage of ownership, and can that percentage change without a lot of hassle if, for instance, our son eventually makes full monthly payments?

[FlyingRon]

Why don't you just loan him the money for the down payment, possibly taking back a second. If you coborrow with him, if he takes a powder you'll be on the hook to pay it and will bear the credit trashing and foreclosure if you do not.

If you do take an ownership stake, you're free to deed him more and more of the property based on your perception of his equity but it won't be automatic.
However, if you are in the medicaid age range, you have to be careful not to do anything that might screw your eligibility there.

[Lips78]

FlyingRon. I don't understand the "possibly taking back a second" part of your response. Do you mean why don't we take a second mortgage on our primary residence as a way to help fund the purchase of the home for our son? Also, since he would not qualify for a mortgage on his own, we were thinking that by co-owning, we would be the ultimate guarantors of the loan, and he wouldn't have to buy mortgage insurance. Thoughts?

[FlyingRon]

No, I mean you become a "lender" for a second mortgage on the property your son is buying (and record it).

[Lips78]

Ahh, I hadn't thought of that. Thanks for the interesting idea!