Posted on: 28th Sep, 2009 08:12 pm
My wife and I are in the process of upgrading our home - we have approx 120k worth of equity in hour home based on a conservative estimate of home sale value less real estate fees.
My wife recently asked my father in law for an advance of 25-50k to put as an additional downpayment on the 120K as we are looking for a home in the 450-500k range.
My question is, what are some of the questions I should consider?
a) We have not yet talked about the interest rate that he would charge based on the portion of the loan.
b) He lives in Canada and we have not discussed any tax implications / legal implications, etc.
c) Others?
Ideally, and without knowing all the details I would like to have him lend us 250K, use that amount for the down payment on the new home and take out the "balance" with a bank for the remainder of the money required to buy the new home. Then, upon selling the old home, use that equity to pay off the bank.
Any suggestions?
My wife recently asked my father in law for an advance of 25-50k to put as an additional downpayment on the 120K as we are looking for a home in the 450-500k range.
My question is, what are some of the questions I should consider?
a) We have not yet talked about the interest rate that he would charge based on the portion of the loan.
b) He lives in Canada and we have not discussed any tax implications / legal implications, etc.
c) Others?
Ideally, and without knowing all the details I would like to have him lend us 250K, use that amount for the down payment on the new home and take out the "balance" with a bank for the remainder of the money required to buy the new home. Then, upon selling the old home, use that equity to pay off the bank.
Any suggestions?
Hi kwrsmith!
Welcome to forums!
If your father-in-law gives you the amount as a gift, then he would have to pay gift taxes depending upon the laws of his country. As far as you are concerned, the lender would ask for a gift letter from you in order to know where the money came from. As far as the interest rate is concerned, it will depend upon his discretion as to what he would charge. Both of you can negotiate and decide on the interest rate.
As far as buying the new property is concerned, you can use the equity from your old home to pay off the bank. However, you should remember, that you need to pay off your father-in-law as well.
Sussane
Welcome to forums!
If your father-in-law gives you the amount as a gift, then he would have to pay gift taxes depending upon the laws of his country. As far as you are concerned, the lender would ask for a gift letter from you in order to know where the money came from. As far as the interest rate is concerned, it will depend upon his discretion as to what he would charge. Both of you can negotiate and decide on the interest rate.
As far as buying the new property is concerned, you can use the equity from your old home to pay off the bank. However, you should remember, that you need to pay off your father-in-law as well.
Sussane
boy oh boy, i would sure hope you wouldn't be able to forget that you had to pay back your father in law.
maybe he would repossess his daughter if you didn't!
maybe he would repossess his daughter if you didn't!
