Skip to main content

Best way to buy house that my sister owns that my parents live in and her to buy a house I own

Ok sorry in advance this is a little long, but wanted to provide as much information to get the correct feedback. Thanks in advance!

Here is my scenario.

I own a house (Crest Dr) with a mortgage of around $110k.

My sister owns a house (Kip Ln) with a mortgage of around 115k.

My sister moved into the Crest Dr house in Jan 2020. My sister moved out of the Kip house after she got married but our parents still live in the Kip house. I live in another house that I own.

Our plan was for my sister and I to basically buy each other's houses (Crest Dr and Kip Ln). My parents would continue to live in the Kip Ln house. Right now, I still pay the mortgage on the Crest Dr house and she continues to pay the mortgage on the Kip Ln house. We would basically buy the homes for what is owed on it (my sister would pay the higher amount)

I would like to buy the Kip Ln house where my parents live but buy it not as an investment property so that I can get the best interest rate and to be able to still do homestead even though I will not be living in the home. I know that there is some regulation or rule stating if elderly parents can't afford to pay mortgage, then I might be able to get around the 'investment' property rule, but no one has provided me any guidance on what would qualify them for it. I have also looked at a 'life estate' as I believe that will allow me to get homestead still to reduce property tax.

Questions are

1. Does anyone know what the requirements are for someone to buy a home for parents to live in and not be an investment property? 2. if above is not possible, can my Dad and I co sign on the mortgage so that we can get 'primary' house rates? 3. If he does cosign, will Medicaid be able to still go after the house if we need Medicaid down the road for nursing homes, etc? or will the life estate protect him from that? 1. Does a 'life estate' allow for homestead even if I don't live in the house? 4. We planned to use gift of equity since both houses are worth around 300k now. Is there any benefit to have the purchase price around 300k and do gift of equity so that the actual loan amount is what's owed on the house? For tax purposes, is it better to show a higher purchase price for depreciation?

Do we need to report this gift of equity on taxes? I know there is like a limit of $15k a year for gift tax. But the amount over this wouldn't affect taxes other than going toward our lifetime gift tax amount - is this correct?

submitted by /u/One_Main3784
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/mhimhc/best_way_to_buy_house_that_my_sister_owns_that_my/
Labels:

Comments

Post a Comment

Popular posts from this blog

Aren't comps/CMAs useless with buyer credits at close happening now?

I'm looking into buying a new construction townhouse in my HCOL US city. I'm seeing builders offering interest rate buydowns worth $20k-$60k on $800k homes (rather than just lowering prices) in order to keep their comps high for their other units, now that buyer demand has been declining. I asked my agent about these, and he said these buydowns aren't even the full story: buyers can write all kinds of other credits into an offer, like their closing costs, prepaid sewer fees, etc. Apparently cash buyers can just write in a "buyer credit at close" for any amount in their offer. So a new townhouse that appeared to sell for $800k in the MLS might have actually been a cash offer with a $100k+ buyer credit at close, meaning the buyer only spent $700k or less in total, but to the rest of the world they can only see the $800k! So that made me realize I can't trust comps/CMAs for other new construction townhouses. The sales prices could be way lower than they appear
1 comment
Read more

Fast Rising HOA Fees on NYC Condo, No Budget Provided

My wife and I are first time homeowners and could use some advice on a situation we've been having with our management company and Board. We bought a condo in Brooklyn two years ago, and since then our HOA fees have climbed dramatically. In August of last year, our fees were increased by ~30% and just yesterday we received notice that this new figure would be increased by 16% as of June 1st. The by-laws for our building state that ten days before such a change goes into effect, the Board must provide unit owners with the itemized budget upon which the new numbers were based. This didn't happen last year, and when I asked the management company about it, they just kept vaguely insisting the Board had done due diligence. After I kept pressing, they finally sent a budget that was several years old, so obviously not the one that the new numbers were based on. When I asked the management company for contact information for the Board to get further clarification, I was told that th
Post a Comment
Read more

How to create fidelity investments current bank statement for lender during escrow

I transferred a certain amount to my bank account to complete the minimum down payment required. The bank wants a current statement of the transaction. Unfortunately, fidelity only does quarterly statements so a December statement is not available and we are due to close next week. I called fidelity and they they can only provide a letter but the bank said that won’t suffice. Any way I can find or make one of my own that has my account number/name along with all the recent month’s activities? submitted by /u/bodaciousbeans [link] [comments] source https://www.reddit.com/r/RealEstate/comments/zmnnqo/how_to_create_fidelity_investments_current_bank/
Post a Comment
Read more