My mother just won some settlement money from a lawsuit. Her husband (not my father) want to purchase a house but have it titled in my name because apparently their credit is very bad. They lured me in with a $8000 tax credit for first-time home buyers in 2009 that may not be extending for houses purchased in 2010. They want me to apply for a FHA loan and because my credit is better, it would lower their monthly mortgage payments.
My Background:
I am 27 yrs old, work F-T, am a renter and paid off my car in July, which brought my credit score up. After Oct. the only debt I will have is 20k in student loans. My next step is to save money to buy a house for myself in about 3-5 years.
I do not want to participate in something that is potentialy frauding the IRS. I am very ametuer went it comes to home ownership etc. Please advice because I want to back out of this if it is can affect me in the future when I want to purchase a house for myself.
Related Post :
Other post:
- Does anyone know where i can get a loan with bad credit,not a payday loan, i need 850. urgently?
- Cheaper and safer service payday loan?
- Buy Looking for a house, but the credit is very bad, it is a place that would loan money to someone with bad credit?
- easiest place to refinance a car with bad bredit?
- Who will refinance an auto loan with a bankruptcy on file. . ?
sounds like they want you to sign the loan. that would be stupid.
if they want deed in your name then who cares. that means you own the house. but if they want you to sign the loan or cosign then tell them to pound sand.
if their credit is bad you can bet they will default on this loan and you will be screwed. what kind of mother would ask this?
First off, they’re running late on getting the tax credit for FTHB if that’s what their goal is. Number Two, no they won’t even qualify for the credit if you (the home buyer) are not living there. Number three, it sounds like they want you to take out the mortgage… so, if they ever quit paying you… you’ll owe the money because it’s your mortgage. Don’t do this… you seem like you are doing well financially and you have your own goal to buy a house in 3-5 years… that’s going to be difficult if you already own a home (your parents).
Do not do this. You keep saying that they want you on the title to the house, but what they want is you to be on the mortgage for the house. The title is the deed, and the ownership interest. The mortgage is the loan, the financing, and the financial responsibility regardless of who is living in the house.
You don’t qualify for the tax credit if you won’t be using it as your primary residence. Plus, I doubt you would be able to close by Nov 30, so let’s just take that entire incentive off the table.
If you DID do this, which I think would be terribly stupid, you should buy it in your name, your name only on the title, and your name only on the mortgage. Then have formal leasing agreement written up between you and your mom/stepdad. You better be prepared to keep up with the payments if they are late on them while still paying for wherever you live now if you do this.
Now, also, if you do this, forget about buying your own house in a couple of years unless you are making enough money to have both mortgages at once. Once you buy this house for your parents that is going to count as total debt outstanding against you and you will have a very hard time qualifying for a mortgage of your own. For that reason alone you should tell them no, and explain that you want to buy your own house in a couple of years. Don’t listen to all of the “we will be in better shape and will then buy it from you in a couple of years” stuff if they try that. I know you would like to help your mom but this is your life and your credit, don’t screw it up!
This would be a completely stupid thing to do.
No one gets bad credit by accident, the ethics that got them there will stick and haunt you.
The biggest problem with this plan is in order to have 2 houses, theirs and yours you will have to earn a lot of money, enough to qualify for both loans. So you are basically setting yourself up to rent forever.
In addition to traud against the IRS you will need to commit banking fraud in order to obtain the FHA loan, which requires you to live in the house.
First off, they’re running late on getting the tax credit for FTHB if that’s what their goal is. Number Two, no they won’t even qualify for the credit if you (the home buyer) are not living there. Number three, it sounds like they want you to take out the mortgage… so, if they ever quit paying you… you’ll owe the money because it’s your mortgage. Don’t do this… you seem like you are doing well financially and you have your own goal to buy a house in 3-5 years… that’s going to be difficult if you already own a home (your parents).
to get the $8000 tax credit for 2009, you have to live in the house for 3 years. so if you don’t plan on claiming that as your primary residence for 36 mos, you’re not eligible. if you move prior to 3 years, you have to PAY BACK the $8000 to the IRS.
DO NOT DO IT – your credit could be ruined if they decide to stop making payments and the bank will come after you! and it would also ruin any chance you have of getting your own house any time soon
and yes – if you are not living in the house and you claim the $8000 – that would be fraud and YOU will be in trouble with the IRS, not them.
If they just won money in a lawsuit – they don;t need your help – let them deal with their own credit issues – they won’t get better if THEY don;t work on it themselves.
GET OUT OF THIS DEAL while you still can.
just tell them, you checked and you don’t make enough, and your student loans are too high to get a mortgage (which may very well be true)