I am under contract for a house and plan to put 40% down. I could afford the down payment if I sold my current home, but we wanted our offer to be competitive so we made it non-contingent. I can personally cover 20% of the down payment and am planning to borrow money from my parents to make up the difference. They have a line-of-credit tied to their investment account. I am effectively accessing their line of credit. Once my home is sold, I plan to pay back the loan to restore the line of credit. I am wondering whether this arrangement will have tax implications for my parents. From the lender's perspective, they might see it as a gift, but it is in effect a loan as there is an interest rate tied to the line-of-credit and I will be the one paying it.

Do any of the accountants/tax/real estate experts on this board have some advice?