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.
Is it a good idea to pay my parents' mortgage?
I think this is a very difficult question. Your parents don’t seem to have a well thought out long term plan, since they won’t be getting much out of the sale, and over time, rents and living expenses will likely use up all of their money, unless they have other solid and sizeable sources of income you aren’t mentioning.However, paying their home for them has several risks for you: They end up out of money anyways, and tap the equity in the home through some other means. Your sibling, who you haven’t mentioned as helping as well, still gets half of the home? Also, this could very easily lead to big fights inside your family, as time and your investment goes up.Your parents could end up with health bills, or other financial obligations that encumber the home late in life, or even in their estate, and thus despite paying for their home for years, you might not end up with anything. If you are willing to do this, despite the possibility that you end up with nothing, that is certainly a choice.If you wish to do this to help your parents, and don’t ever expect anything for yourself out of it, ok. But as a quasi-investment to ensure your home inheritance, it is likely a very bad investment, and you’d be better off to begin investing for yourself, without the likely family entanglements, problems and fights that will come down the line.
Can i get help paying off my mortgage?
There are various programs for people who cannot afford their mortgage payments due to financial hardships. If they cannot afford the payments and do fall behind in their payments, then they might face foreclosure. (If you are not signed on the mortgage loan as a borrower, then you should not have any financial obligations). Selling the home and repaying the mortgage is one possible solution. If the property is worth less than the mortgage, then a short-sale is an alternative. Naturally, for most people, these are last resort solutions. I suggest that your parents keep in contact with their mortgage servicer and check out any foreclosure prevention programs. Here are a few different types: Home Affordable Unemployment Program Forbearance Home Affordable Modification Program (HAMP) or other modification programs. In addition there are different state based hardship programs that were initiated under the Hardest Hit Fund program. You can check this link to see if your state has a program: http://homeloanhelp.bankofamerica.com/en... It is very admirable that you are helping your parents meet their financial obligations. In addition to the above suggestions I recommend that you sit down with them and work out a budget. This will help them understand the amount of money that they can afford to pay toward their mortgage. It is possible to get help from a HUD counselor. Here is a link to help you find an approved HUD housing counselor: http://www.hud.gov/offices/hsg/sfh/hcc/h... .
Can my parents put my name on the mortgage?
I pay the mortgage on the house my parents own. They would like to put it in my name. What is the best way to do this, if we want to keep their names on it and my name as well? Does this have ramifications for my credit score?
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.
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 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.
How will my parents pay off their mortgage after retirement?
I asked them and they said I would have to start financially providing for them once I get a full time job and they retire and it just seems like half my adulthood would be lost just trying to take care of them. I would feel like I'm never going to grow up if I'm just going to be living with them.
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