Posted on: 18th Oct, 2011 01:29 pm
If I paid 255,000 for my house and now owe 213,000 and want to give the gift of equity to my daughter, how much do I need to sell the house to her for and does that mean i get 0 out of the whole deal?
Yes you are correct. If you are gifting equity, the reason is to help a family member become a homeowner. So if you only have $42,000 in equity and you gift it all, then you receive nothing. Keep in mind that when you do a gift of equity, your daughter would have to bring in minimum of 5% of her own funds. The reason is, when you gift equity, to avoid having your daughter putting any money into the transaction, you need to have a 80% or less loan to value. You are at 84%. Either way, gifts are a nice way to help family with down payments. Good luck.
A gift of equity is when you are giving someone down payment money. You seem to be talking about giving the home to someone else. That is entirely different.
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