Buying a house... (2 questions)

[series1000]

My brother has about $50,000 in his bank account from playing Poker. He wants to buy a house for my mother and step-father to live in (they have never owned a house) and keep it after that. The thing is he does not have a job and is in school.

My mother pays $1250 a month for rent excluding utilities, which I think is a rip off. Both mother and step-father are working full time and make decent income but they were unable to start saving for a house because of taking care of 4 children the past 20 years.

My questions are can my brother purchase the house with $50,000 down if my mother and step father are making enough income to pay for the mortgage? Does the house have to be under my mothers name or can it be under my brothers name? Don't know how mortgages work.. but my brother cannot show steady income but my parents can.

Appreciate the help, thank you :)

[drago403]

Truth is you would need to talk to the bank, 50k is a decent deposit, but won't your borther be in debt after?? but anyways the bank might be able to work something else for mortgage if your mom is already payign 1250per month that seems like a decent mortgage plan.. but u have to incoporate house insurance and property tax which can put u well over 2k...

That's my input.

good luck.

[coolspot]

Unless your brother has a regular stream of income, the 50K would barely be enough to cover the downpayment on the house.

What sort of house is your brother looking at? Detached? Townhouse? Condo? Semi-Detached?

You can probably get a Semi-Detached for ~350K. Detached will run you 400K+ for a decent place.

However you could buy a condo for <300K, might be an option to think about.

Just remember, home ownership isn't cheap... you need to pay for maintenance, utilities, insurance, mortgage, property tax, and the list goes on.

[series1000]

Well my the combined household income of my mothers house is $9000 a month, if everyone wants to pitch in I think that is enough to pay those bills?

I jus don't like the fact she is renting and all that money she has put into the apartment already (over 100,000) has just gone to waste.. at least with a house that money is going somewhere.

[spf1971]

But I don't think you'd be able to get mortgage approval based on the combined income of your extended family. Your brother could loan your mother and step-father the down payment.

[Wonderdollar]

My brother has about $50,000 in his bank account from playing Poker. He wants to buy a house for my mother and step-father to live in (they have never owned a house) and keep it after that. The thing is he does not have a job and is in school.

My mother pays $1250 a month for rent excluding utilities, which I think is a rip off. Both mother and step-father are working full time and make decent income but they were unable to start saving for a house because of taking care of 4 children the past 20 years.

My questions are can my brother purchase the house with $50,000 down if my mother and step father are making enough income to pay for the mortgage? Does the house have to be under my mothers name or can it be under my brothers name? Don't know how mortgages work.. but my brother cannot show steady income but my parents can.

Appreciate the help, thank you :)


Since you mentioned that your mother and your step father are making good income, they can get approved for mortgage on their own and the down payment can be provided by your brother to them as a gift and the house can be only in your parents name.

Alternatively all three of them can go on title for the mortgage where the down payment comes from your brothers account and your parents qualify based on their income.

[deuce]

Since you mentioned that your mother and your step father are making good income, they can get approved for mortgage on their own and the down payment can be provided by your brother to them as a gift and the house can be only in your parents name.

Alternatively all three of them can go on title for the mortgage where the down payment comes from your brothers account and your parents qualify based on their income.


exactly

[jande9]

Since you mentioned that your mother and your step father are making good income, they can get approved for mortgage on their own and the down payment can be provided by your brother to them as a gift and the house can be only in your parents name.

Alternatively all three of them can go on title for the mortgage where the down payment comes from your brothers account and your parents qualify based on their income.

There will be tax issues if all three are on the deed but the brother doesn't live there. Only two thirds of the appreciation of the value of the house will be tax free, and the other third will be a taxable capital gain for the brother, assuming over the long term the house appreciates in value. It also removes the house from the assets to be divided up if they die, as it will automatically become his.

Also it is a bit tricky if the house loses value because only the brother will be losing money, the mum and the step dad won't be.

The brother can simply lend them the money with something in his parents will giving him the money back before the assets are divided if they pass away.

Does the brother expect to be paid back in some regular way, or is he just giving them the money?

edit.

After rereading the original post I see he was hoping to lend them the money and the when they pass away he keeps the house, which would work assuming the other members of the family are OK with that.

[grant]

There will be tax issues if all three are on the deed but the brother doesn't live there. Only two thirds of the appreciation of the value of the house will be tax free, and the other third will be a taxable
Not if the brother & parents make a written agreement that it will be the parents' principal residence, and the brother is only on title to secure his interest in the property.

Speak to your tax accountant about this. It can done.