Buying Home For Parents
REM #F737
By Ilyce R. Glink
Summary: A ThinkGlink reader has been asked by her parents to help them out of a bad financial situation. She is worried that this will hurt her chance of buying her own home in the future. Ilyce explains how mortgage companies analyze risk and suggests she get a good attorney to write up a contract before entering any deal with her parents.
Q: My parents are having financial problems and want my brother and I to purchase
their home from them. They will continue to pay for everything and would like
to buy the house back from us in a year or two.
Are there other options to help them besides putting my good name on the line? Also, I will be getting married later this year and my fiance and I would like to purchase a home of our own in 2 to 3 years.
Will this hurt or hinder my chances?
A: If you're going to purchase the house and then sell it back to your parents
in a year or so, as long as you and your brother get a mortgage and make the
payments, it should help your credit, not hurt it.
However, what happens if your parents can't afford to buy back the home? Then,
you will have a large financial obligation on your credit history and it will
have an impact on your ability to buy a home for yourself, unless your husband
can afford to buy a home for the two of you on his income alone.
Please talk to a real estate attorney. If you're going to do this for your parents,
you'll want a solidly worded contract that protects you and your brother, not
to mention your parents.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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