Buying Home From Parents

Added February 13, 2007 by Ilyce R. Glink

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Summary: A daughter's parents have asked she and her brother to buy their home from them to get them out of financial problems. Buying the home from her parents could help her credit if they buy it back, but could hurt her if they are unable to buy it bake when they say they will. A good attorney can write up a contract before entering any deal to buy her parents home.

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.

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