gift / loan tax $20k

[btoovey]

What is the name of your state? NJ

Hello forum,

Was wondering the best way to borrow 20k from my father to be repaid in 3 - 6 months. I would like to show a mortage company that I have funds available in my account for down payment, but would like the seller to make the down payment, then transfer these funds back to my father. Any ideas?

Thanks,
Brian

 

[Zigner]

This sounds like some sort of fraud to me

 

[jerzeyites]

Brian: It is my opinion that you should very carefully review all the documents regarding your mortage application & specifically the portion dealing with the down payments.
There is likely language that will inquire [and require you to attest to] about the source of the funds used for the down payment and that they may not be borrowed funds.

In the alternative....Dad may be able to gift you the $ and that could be acceptable....but in this current market that might not be the case.


Oh....and why should the Seller make the down payment? I too smell some 5 day old fish.

Good luck

 

[Dandy Don]

If the seller does make the down payment, are you certain that it would (legally and according to real estate procedures) go to you?

Do you have a bank or credit union that would loan you the money instead of going to your father?

Can you afford to make the monthly mortgage payments after you buy the home?

 

[btoovey]

I was planning on having the seller bring a check to the closing for 5%. I am just concerned about the transfer of money back and forth between my father and what tax issues I face doing that.

Thanks,
Brian

 

[Ozark_Sophist]

I was planning on having the seller bring a check to the closing for 5%. I am just concerned about the transfer of money back and forth between my father and what tax issues I face doing that.

Thanks,
Brian

You might also be concerned about the felony fraud issues you face doing that.

 

[btoovey]

what are you talking about felony fraud. The mortgage company wants to see that you have the money in your possession at least two months ahead of time. They don't care if its a gift. It is very common to have sellers pay for your closing costs and / or downpayment. If your going to throw around terms like felony fraud please back it up.

Brian

 

[jerzeyites]

The mortgage company is not likely to look too favorably at borrowed money for the down payment in these troubled times. I would expect that they will ask direct questions and demand answers as to the source of the funds.

If the answers to those questions are attested to on a mortgage application document that is where the felony fraud charges could come into play.

It is true that Sellers often make the down payment. In these times the situaion will be examined much more closely.

Out of curiousity, what is the name of or the type of lending agency that you are using?
How do you know that they only care about you having the $ for 2 months and that they do not care whether or not the $ is a gift or a loan.

If you have asked these questions to the lender do you have the answers in writing?