Posted on: 14th Dec, 2010 09:39 am
My apologies if this is a common question! My in-laws own their home outright, so they have a few hundred thousand dollars in equity to tap. We were wondering if there are any potential pitfalls if they were to take an equity loan out to buy a home for us, then after purchase we take out an equity loan on our own house to pay them back, essentially leaving us paying on a lower rate equity loan instead of a higher rate mortgage. Aside from not being able to claim mortgage interest on our tax returns (since we would be paying our house off through an equity loan) are there any other big tax gotchas? Thanks for any feedback on this!
-Jeff
-Jeff
Why can you not just buy the house with your down payment plus an equity loan that you get yourself in the first place.
If you can get an equity loan to pay them back, you should also qualify to get the equity loan to purchase in the first place to purchase the property.
If you can get an equity loan to pay them back, you should also qualify to get the equity loan to purchase in the first place to purchase the property.