My parents and I want to swap houses. Is there a way to do this without having to do the whole 20% down, clos

Question

A friend who does titles said an option could be for my parents to take out a home equity loan, buy our house, and then put the deed in our name. Or is it better to just do a gift of equity and call it a day.

Answer 1

If they take out an equity loan they have to stay on the deed- you can't sell property without paying off all liens.  There is a "due on sale" clause on every mortgage.

Answer 2

If both homes are owned free and clear you can swap easily. However, if either of you has a mortgage, you’d still be required to pay it. You can’t just hand your mortgage to your parents and vice versa.  

If you don’t want to get loans to buy from each other, you’d either have to continue paying a mortgage on a home you no longer own or you’d have to trust the other half to keep up payments on a loan tied to your credit (which is a stupid move no matter how they’re related to you).

Answer 3

Due to legalities ; I would suggest you consult with a Real estate Attorney ....

A good one will charge you $75 to $125 for the consult ; BUT at least you will now what to do and the best way to do it that is totally legal.

Answer 4

how do the values compare?

are both single family homes?

do a tax free exchange

Gifts more than $12000 per person per year are taxable gifts

http://www.enex.com/1031/notataxloophole...

http://www.kate-jody.com/essays/taxdefer...

http://www.1031exchangeadvantage.com/art...