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Can I be a lender for my daughter's purchase of a home?

My daughter is planning to buy a house in her name and she wants me to be a lender with appropriate interest rate for a 30 year loan. What are the tax implications for both of us? Shall I sell my stocks or get a home equity loan from my house to be a lender for her new home? by palanki37279 from Santa Clara, California. Jun 8th 2018 Reply


Ralph Richard Guertin (ralph@absolutelowrates.com)
#1 ranked lender in Florida - 705 contributions

Sounds like a question for your CPA...

Jun 8th 2018
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,765 contributions

Wow... Nice of you, but agreed, that is the question for a CPA, not a bunch of mortgage lenders.

Jun 8th 2018
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,428 contributions

I agree that a CPA or financial planner would be the best person to discuss this with but Personally, I think there's hardly any benefit, but lots of risk. First.. if your daughter has good credit, interest rates with the banks are pretty good right now.. 5% plus or minus.. are you making more than 5% annually on your stocks? if so, then by selling your stocks to finance your daughter will actually cost you money.. If you do finance your daughter, and she cant make the payment, would you foreclose on her? What about something coming up where you need the funds you lent your daughter.. you cannot get those funds if she cannot afford to pay you off.. but with stocks, you can sell then with a click of a mouse and the funds are in your account instantly.. The banks are designed to take the risk of doing mortgages, but their model is based on many, many mortgages.. you on the other hand.. can you afford to deal with a loss if something goes wrong? I have 2 daughters, and I've helped them both buy their first homes.. I've paid their down payment and their closing costs.. I've told them both that if a day ever comes where you don't have the funds to pay your mortgage, then call me and I will give you the money.. Thankful, neither of them has ever asked, but my risk and exposure is done.. If you want to help her out,,, that might be the better way.. But again, talk to your financial planner.. they can give you the pro's and con's... I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / LendUS, NMLS 1938/ AZMB0121893

Jun 12th 2018
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