Many areas of the country are experiencing buyers markets, and current tax laws make this a very attractive time for parents to help their children become homeowners. Prices and interest rates may never be lower than they are now, so strongly consider this potential investment in your children's future.
As parents, you can provide a significant downpayment, free of taxation. Individuals may gift up to $13,000 per year, so two parents making gifts to their child and spouse can give a total of $52,000 in one year without paying gift tax!
Above and beyond the outright gift, you may loan your family money, as long as you charge a minimum interest rate, which is currently very low. Then you can make your gifts each year, and your child's family can use the gifts to pay the loan!
If neither of these options is attractive, you could purchase the home yourself and then set up a Qualified Personal Residence Trust (QPRT), with the home passing to the children at the end of an established term, tax free. You will need to consult with your financial advisor and employ an attorney to handle this kind of transaction.
Begin by meeting with a real estate agent and explaining your situation. Contrary to what you may have been hearing, there is practically no better investment today than real estate.
Showing posts with label homeowners. Show all posts
Showing posts with label homeowners. Show all posts
2/15/10
1/11/10
Myth Busting
When a homeowner faces default on their mortgage, there may be two options: foreclosure or short sale. Foreclosure can be devastating, both emotionally and financially. A short sale, or one in which the lender accepts a selling price less than the amount owed, is a better option for both the lender and the homeowner.
Regrettably, nearly seven out of ten homeowners proceed through foreclosure without ever listing their home for sale. This is due largely to perceived myths about the process, and we need to put a few of these misconceptions to rest.
First, homeowners assume the bank would rather foreclose than accept a short sale. Not true - foreclosure is often more costly for the lender, and short sales often sell for more than foreclosed listings. The banks are trying anything possible, within reason, to avoid the foreclosure process.
Next, homeowners believe there is a stigma attached to short sale listings, and that buyers have no interest in such properties. Not true - to the contrary, many smart buyers are specifically seeking out such offerings for the value they present compared to traditional listings.
Finally, homeowners often assume that there's not enough time to close a short sale before foreclosure is final. Not true - foreclosure is a lengthy process and there is time to negotiate a better result, but you need to start today.
Regrettably, nearly seven out of ten homeowners proceed through foreclosure without ever listing their home for sale. This is due largely to perceived myths about the process, and we need to put a few of these misconceptions to rest.
First, homeowners assume the bank would rather foreclose than accept a short sale. Not true - foreclosure is often more costly for the lender, and short sales often sell for more than foreclosed listings. The banks are trying anything possible, within reason, to avoid the foreclosure process.
Next, homeowners believe there is a stigma attached to short sale listings, and that buyers have no interest in such properties. Not true - to the contrary, many smart buyers are specifically seeking out such offerings for the value they present compared to traditional listings.
Finally, homeowners often assume that there's not enough time to close a short sale before foreclosure is final. Not true - foreclosure is a lengthy process and there is time to negotiate a better result, but you need to start today.
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