What's the best way to help my parents who can't afford their mortgage?
There are many options which they can consider, however with the limitations you had listed (they must stay in this area and them being priced out of the local real estate market), there are only a couple of solutions.Since selling this house is not an option, even if they would downsize (as parents age, they would have less energy/time/finances to take care of their dwelling and their property taxes), you could check if there are any apartments/condos/townhomes that can serve as a suitable replacement for their house.With respect to the reverse mortgage, here it all depends on you, actually: do you want to have this house as inheritance? If you do, then reverse mortgage (re-mortgaging the house) will put a lien on the property which is only released when the property is sold and the bank gets its money back (with interest and all) - which means you will not get anything at all from that sale.If you don’t want this house, then your parents can take out this reverse mortgage and forget all about their monthly payments and have the retirement money (if they qualify for the terms - main requirement is to own home outright).You then have the option of purchasing that house from them and renting it to them. This can be done “at cost” (whatever your monthly payment would be) or an official rental (with them paying rent to you, you reporting it to the IRS and paying taxes on this income, which means you would need to at least double your “cost”, which can come to the exact amount your parents are paying now: earlier response listed $1k monthly payment on the mortgage, and if you double it, it would be $2k that your parents are paying now). You can also just let them live there, but you don’t exactly say what your financial situation is and if you can afford this option, and depending on what your desired outcome is. This one is up to you since there are not enough details available.I can only share the rental property investment calculator, if you decide to go with the official rental agreement: Investment Property Analyzer – Rental Property ROI Calculator
If my parents help pay for the mortgage down payment on my first house, what is the recommended legal way to set that up?
You have created a number of issues with your scenario. First issue is a Tax Issue. If your parents contribute, will it be in the form of debt? If so, it is no longer a down payment nor gift money. That leaves you in a position where you have to come in with at least some of your own money. There are tax ramifications for your parents as to how they intent to treat this property on their tax returns. If they want to come in with the money as a Gift, well then a Gift is a Gift and there is no promise of paying back. However, IRS will have something to say about it. Very important that your parent's consult with their CPA. If you call it a gift, but it is not gift and you later secure it with a mortgage or deed of trust, then you have committed mortgage fraud.Another issue is the Mortgage Issue. Most mortgages require at least a minimum of cash investment by the borrower. Unless your parent gifts 20%, then that takes us back to the first issue above. Is it really a gift?Next issue is a legal one. How will your parents secure their investment / contribution? Is it debt? If debt, then they may want a Mortgage or Deed of Trust. If debt, then your mortgage loan officer is going to want to chime in as this new debt will have to disclosed to underwriting and will affect your Debt to Income Ratio. Still a legal issue, ownership. How will they take title with you? Joint Tenants? Tenants in Common? Each of those have ramifications for you.The list could go on. I would recommend that you sit down with your Mortgage Loan Officer and confirm what sources of that "down payment" are acceptable. Then review that with your parents. Your parents should then consult CPA, Investment and Legal Counsel to discuss the ramifications for them. You need to consult your own Legal Counsel on the affect of your parents decision on how they are going to contribute and secure their contribution. I can tell you that there is no fight like a fight over money between family. Especially between parents and children.
My parents can't afford their mortgage. They took a loan out on their house and they need help. Where can they get assistance?
It depends on what kind of assistance you are talking about.In a general sense, nobody is entitled to live somewhere. If your parents are in possession of a house that is too expensive for them, they have no default right to keep living there. If they could afford it in the past and now they can’t, tough luck. If they lived there for 1 day or 20 years it doesn’t matter to anyone unless they can pay to keep living there.If it’s the case that the house costs more than they can afford, they need to sell the house and move to somewhere they can afford. You should encourage them to do that. The sooner the better.If one or both parents has the potential to work but is not currently working, they may be able to get a job and subsequently they can afford the house. If that’s the kind of assistance you are talking about, your state will generally have some kind of unemployment office and resources to assist with that kind of thing.It’s important to point out here that it’s pretty rare that borrowing your way out of a problem is super helpful outside of like student loans or something.If, for example, somebody has $100/m left over after paying their bills and they really want to spend $1000/m after all their bills and they turn to credit cards to cover that gap, usually the result is a disaster.It’s not very different if you are borrowing using some different method, like if they are in the same situation and they turn to payday lenders, loan sharks, etc.In a general sense, spending is meant to come out of income, not savings. Home equity one has generated in the past, in this context, is a form of savings. Only in the most extreme cases should the “plan” be to spend down savings. That goes for anybody.If circumstances change and the outlook is anything other than an imminent reversal of circumstance (like somebody lost a job and they have a high likelihood of immediately getting another job) then plan A should be to downsize one’s spending.
How can I get a loan for IIM without any help from my parents?
You can get an educational loan up to some limit (decided by the bank) without any co-borrower such as a parent. Even if the loan amount is higher than the limit, this limit is not strictly enforced for those who are joining one of the older IIMs as the bank is quite sure you can get a good job and repay their loan. It is also possibly for you to get someone else who is related and on a regular job or business to sign off with you. The relative will not be involved any further with the bank as long as you repay your loan regularly starting three months after graduation. So barring any extra-ordinary situation, there is no issue in asking a relative to sign off with you. In the extra-ordinary cases, the bank is authorized to write off the loan without any burden of repayment on the relative who signed - they may need a letter from the IIM as to the nature of the extra-ordinary case.
If my parents co-sign my mortgage, will that eliminate PMI??
Nope, won't help. It isn't a credit score matter. If you don't have the 20% down, you have to pay the PMI. The good news is that it's tax deductible now. You will also have to pay that PMI until you have paid down 20% of the principal. Don't count on appreciation and a 120%+ appraised value removing the PMI on down the road.
Can I buy my parents reverse mortgage off the bank in Australia?
You can’t buy it, but you could probably pay it off for them.
Where can someone find help to pay their mortgage?
Look in a mirror and you will see the one most likely able to fix the problem. Either do something to raise your income like taking in a room mate or getting a part time job or go through all your expenses and find a way to cut your costs. There are lots of threads on here about how to do that.Unless your parents of family can help there are no magic tricks to find someone who will help pay your mortgage. Perhaps you should put the place up for sale and find a cheaper place to live.
If a parent owes money on a mortgage and cannot pay anymore, would it be smart for their child to buy the house at a lower price and in turn get a lower mortgage payment?
Well the parent could refinance the mortgage since it's presumably the balance is lower.If the child is going to buy the house for the lower price it still has to be enough to pay off the old mortgage.I assume either way the parents are going to stay in the house and the payments are going to be made by either the child or the parents.If that's the case it may be cheaper to refinance rather than the child to buy it. If the child buys that you have a new mortgage which is going to probably require all the inspections and various fees and things that go along with buying a house. Refinancing often allows most of those things to be skipped.
Mortgage question. My husband and I want to build on parents land. Can we get a mortgage to build?
The bank won't give you a normal mortgage based on your parents owning the land. However, there might be a couple of options. If the parents give you a long term leasehold, for instance they give you a 40 year lease on the property - say for $1 a year, or month, or $1000 a year, whatever, then you have an ownership interest via the lease. This is basically what a lot of commercial properties do. They lease the ground and own the building. The negative for this is that you won't get anywhere near a 100% loan - maybe 60%or 70% of the valuation, so you will need to come up with a good down for this, The second would be if they bring you in on ownership to the property, in otherwords you hold joint ownership with them. Then, you can get financing jointly. A final way is with a family trust. You set up a real estate trust to handle the property. The trust gets the financing and builds the home. According to the terms of the trust, the home belongs to you, while the land remains the property of the parents. The problem with this is the land doesn't stay in the names of the parents, but goes into the name of the trust, although it will remain the parent's property, so they may not go for this. Talk to a good real estate and probate lawyer about the options. Hope this helps