Owing money to family is no fun

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Sep 5, 2024
6:58:52am

ovalY Starter

Owing money to family is no fun

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ovalY

Bio page: ovalY
Joined: Feb 24, 2014
Last login: Sep 18, 2024
Total posts: 1,038 (0 FO)

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Messages

Author

Time

Tax Implications for "Borrowing" Money from Family

trueblew

Sep 4, 9:38pm

They have to recognize the interest income you're paying but get an expense

DirtyWater

Sep 4, 9:41pm

Now that you are under contract, switch back to your original plan of 20% down.

Iman23

Sep 4, 9:48pm

This would make the most sense to me. Sellers won’t care as long as you close.

Sep 4, 10:01pm

Anyone can be a legitimate mortgage lender. The correct thing to do is for them to issue you a 1098 for the interest

mulletino

Sep 4, 9:52pm

Actually, Dodd Frank effectively eliminated private mortgage lending.

DirtyWater

Sep 4, 10:37pm

Does the same rule apply for a 2nd lien mortgage which is what is being discussed?

mulletino

Sep 5, 12:01am

Applies to loans made for the purpose of buying a residence.

DirtyWater

Sep 5, 1:12pm

If you are getting a mortgage anyway is a higher down payment more attractive to

Cheap Seats

Sep 4, 10:27pm

May provide emotional assurance but it is irrelevant in the end

johnnybyu

Sep 4, 10:55pm

I would guess he’s doing it to keep his new loan payment lower. The loan from

Malathion

Sep 4, 10:56pm

Your lender may require your parents to sign something stating that the money is a gift. Borrowing money to cover the

vegasnative

Sep 4, 10:37pm

True, since your 20% just get an 80% loan

johnnybyu

Sep 4, 10:56pm

Did this pass underwriting?

Sep 4, 11:46pm

Underwriting will say it’s a gift and you and Parents will sign additional

Idacoug

Sep 5, 6:07am

Unless documented as a 2nd mortgage which is common.

mulletino

Sep 5, 10:13am

Also, trueblew, you don't want your family calling something a gift that is truly a loan. That's called loan fraud and

mulletino

Sep 5, 10:14am

Owing money to family is no fun

ovalY

Sep 5, 6:58am

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