Posted on: 04th Feb, 2009 12:16 pm
My home is paid for. My husband and I built the house and I would like to see it stay in the family, so I am considering selling it to my daughter. Would it be helpful to her if I were to hold the mortgage?
That depends upon the terms and if you charge interest, the rate, how that interest is handled at tax time.
If she doesn't have a large amt of tradelines she may want to go through a financial institution. This can provide her with good standing, give some responsibility, etc. - OR - If you feel comfortable having her pay you, make sure you set up something in writing. Too many times you hear about families taking advantage of family members.
Ashley is right about the trade lines, but if you were going to offer her a no interest loan, then she can get her tradelines elsewhere.
ashley's tips are correct. an institutional lender will afford your daughter a credit rating that you'd not be able to provide.
that doesnt mean you shouldnt do what you propose. you can provide a better deal for her, no doubt, in terms of an interest rate, etc. as ashley said, i reiterate that it is essential for you to get your entire transaction in writing - make it legal and make it stick. i am sure you love your daughter, and that you trust her as well, but that's no reason for you not to protect yourself from unknown and unintended consequences down the road. i've seen people lose their homes due to the actions of other family members.
that doesnt mean you shouldnt do what you propose. you can provide a better deal for her, no doubt, in terms of an interest rate, etc. as ashley said, i reiterate that it is essential for you to get your entire transaction in writing - make it legal and make it stick. i am sure you love your daughter, and that you trust her as well, but that's no reason for you not to protect yourself from unknown and unintended consequences down the road. i've seen people lose their homes due to the actions of other family members.
