Buying my mothers home?

Question

My Mother is a widow on limited income,i was thinking about moving in with her and making her house payments of 2200 a month.She owes 350,000 on the house but the house is worth 800,000. I would like to buy the home from her and let her live there with all of her belongings and put mine in a storage but i would want to own the home if I'm paying off the exsisting amout.I make over 100,000 a yr but my credit score is too low for a bank loan.She is in her 60"s and afraid she can't afford the house payments anymore and afraid she is going to lose her home. What can I do???? I would want the deed/title in my name but do not know how to do it.

Answer 1

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Answer 2

Please, please,please see an Estate Planning attorney before you do ANYTHING.  It would be better if you had papers drawn up giving you a lien against the house for any amount of money that you pay towards her mortgage, in effect you become her 2nd mortgage holder that pays on her 1st mortgage.  You would then get a 2nd trust deed for the money that you pay.  If your name goes onto the 1st trust deed then you will lose the "stepped up" basis that you would receive when she passes away and leaves the house to you in her trust or will. That could cost you tens of thousands of dollars or more when you sell the house in the future because of the capital gains tax.  You don't say if you are the only beneficiary of her future estate but if you aren't, the lien or 2nd trust deed will protect you for your investment if there are other beneficiaries.  If you would be the only beneficiary of her estate, then the 2nd trust deed will protect the stepped up basis that you would receive at her passing.  

  If her estate will be more than $600,000, and since the house alone is worth $800,000 it will be ( the Estate Tax exclusion returns to $600,000 in 2011 unless Congress changes the law),  then your Mom should have a Revocable or Living Trust drawn up especially since she is so young. That will keep the house, and the rest of her estate, out of Probate.  In California, Probate costs start at $33,000 (Probate costs are set by law so there is no negotiating the price) for a small (less than $600K estate) and go up from there and the Probate can can last a year or longer.  With a Trust, the estate can be settled in one or two months for a few thousand dollars.

PLEASE see a good estate planning attorney now.  It will cost possibly up to $5000 now, but it will save you much more than that later.

Answer 3

The best way to resolve this is to contact a Real Estate Attorney that deals in real estate only. Do not get one that says they do everything. Just look up a large law firm and tell them you want an Real Estate Lawyer. It might cost you a little more in the long run but you get what you pay for. If you're not satisfied with what they recommend, look for another. Better to be safe than sorry later.

Answer 4

So neither of you can afford the house. You need to sell it. Your mother is is very good shape, actually, if she has $450,000 of equity in her house! She can buy a $450,000 house and owe nothing! No mortgage payment to  worry about.

As for you, since you can't afford your own house, perhaps your mother could rent you a room in her new house. You would be providing your mother the extra income she needs to make her life comfortable.

Answer 5

See an estate attorney before you do anything.  There are both legal and tax implications here (you make $100K and have lousy credit??).