Bought a house

[rennigade]

Last week we purchased my in laws home for $220k. We met with the lawyer and had all the proper paperwork signed. We didnt have to take out a loan since we're paying them directly. We did put $100k down though (bye bye savings) and will start making monthly payments to them beginning of 2018. 15 years at $670/month...the best part is 0% interest!

They also purchased a new home and will be moving into that spring of next year. Once they move out of the house we bought...we'll start doing some renovations. We'll probably tackle the easy stuff like gutting/replacing bathrooms, bedrooms. For the kitchen we'll probably just remove wallpaper, paint walls, paint cabinets...possibly replace tile. Our plan is to hopefully move in by end of 2017 depending on our jobs and if wife can work primarily remote.

The only thing that will kinda suck is having to eat the property taxes and home insurance...which equates to around $6k. Plus utilities, plus internet (so we can set up ip cameras/security system.) Other than that it was an easy process which is should have been since we dealt with family. Not having to go to a bank for a loan or dealing with a realtor made things a breeze.

Also...glad to see the site is mostly rid of spam and old threads.

[Jluke]

well that sucks, you're missing out on the mortgage interest deduction

congrats!

[DaveInPgh]

what sucks is he has some freeloading inlaws staying in his house until next spring

[GoodSteward]

what sucks is he has some freeloading inlaws staying in his house until next spring

Just like they had some freeloading kids living with them for years!

[rennigade]

what sucks is he has some freeloading inlaws staying in his house until next spring

lol. When we met with the lawyer he told them before they transferred the deed that once it was in our names...we owned it and could do whatever we wanted with the contents inside the home...meaning we could boot them. He is a family friend but still wanted to make that point clear.

Actually I prefer it that way...less the house will sit empty until we can move in.

[Jluke]

What made you do the transaction in 2016, rather than waiting until they were closer to moving out in spring 2017?

[DaveInPgh]

What made you do the transaction in 2016, rather than waiting until they were closer to moving out in spring 2017?

The Pittsburgh Real Estate market is hot right now and he wanted to get in before the prices went up further.

[Fishindude77]

Congrats, and good job with that hefty down payment.

[rennigade]

What made you do the transaction in 2016, rather than waiting until they were closer to moving out in spring 2017?

In laws found a house they wanted to buy earlier than expected. They didnt want to borrow $100k and pay interest so they asked if we wanted to buy their current house now and we agreed.

[rennigade]

The Pittsburgh Real Estate market is hot right now and he wanted to get in before the prices went up further.

Im on the other side of the state with even fewer jobs to go around. Pittsburgh is too rich for my blood with the up and coming neighborhoods pricing everyone out. I will keep rooting for your steelers though.

[LivingAlmostLarge]

Is it a house in an area you would have bought anyway? Nice if so.

[rennigade]

Is it a house in an area you would have bought anyway? Nice if so.

Yes it is. Its where all of our family lives (where we grew up.)

[disneysteve]

Are there any tax consequences from them giving you 0% financing? I seem to recall something about personal loans needing to be at market rates or else it can trigger an issue but I'm just vaguely remembering that.

[bjl584]

congrats on the house purchase.

nice to see you back on the forum.

[autoxer]

Are there any tax consequences from them giving you 0% financing? I seem to recall something about personal loans needing to be at market rates or else it can trigger an issue but I'm just vaguely remembering that.

I was wondering this too, if they aren't charging market rates, then it might be considered a gift, but it sounds like it might fall under the gift tax limits anyway.