Hello everyone, hopefully someone much more knowledgable than us can answer a few questions. Trying to read up on this issue, but it's rather confusing. Here is the background:
Youngest daughter is renting an apt and has been tryng to save to buy a condo. She works FT, is very responsible, pays all of her bills, but just doesn't earn that much. She's having a hard time qualifying for a mortgage and feels she's throwing her money away renting. We thought we'd buy a condo and have her pay us the mortgage, giving her a generous interest rate (2%) for 15 years. She says she plans on paying it off sooner, but that is incidental at this point. The fees (HOA, electric, insurance) she will be responsible for and can afford it. We've always thought about owning a rental property and this would be perfect as we know the people living there. Until it's paid off it stays in our name. Also, a friend of hers will rent out the 2nd bedroom from us. If this friend leaves we'll have to get another renter. We all understand that.
Here's the questions: what are we missing in all of this? We've never had a problem with her and don't necessarily feel we need all of this in writing, but if it needs to be our attorney said she'll draw up papers. If my daughter for some reason decides to move we'll either rent it out or sell it. We've discussed what happens if the property increases in value at the time she sells one day. We've said if she owns it outright at that point than it's hers. She generously said she feels we should split it because of offering her such a low rate on the mortgage.
Not sure what we're missing, but I am sure it's something!
BTW, we do have other children and they are absolutely fine with us helping her out. We also told them all that our will would be changed so that if anything happened to us she'd own the condo and the older children would get equivalent cash so all is fair.
Ok, let me have it....
Youngest daughter is renting an apt and has been tryng to save to buy a condo. She works FT, is very responsible, pays all of her bills, but just doesn't earn that much. She's having a hard time qualifying for a mortgage and feels she's throwing her money away renting. We thought we'd buy a condo and have her pay us the mortgage, giving her a generous interest rate (2%) for 15 years. She says she plans on paying it off sooner, but that is incidental at this point. The fees (HOA, electric, insurance) she will be responsible for and can afford it. We've always thought about owning a rental property and this would be perfect as we know the people living there. Until it's paid off it stays in our name. Also, a friend of hers will rent out the 2nd bedroom from us. If this friend leaves we'll have to get another renter. We all understand that.
Here's the questions: what are we missing in all of this? We've never had a problem with her and don't necessarily feel we need all of this in writing, but if it needs to be our attorney said she'll draw up papers. If my daughter for some reason decides to move we'll either rent it out or sell it. We've discussed what happens if the property increases in value at the time she sells one day. We've said if she owns it outright at that point than it's hers. She generously said she feels we should split it because of offering her such a low rate on the mortgage.
Not sure what we're missing, but I am sure it's something!
BTW, we do have other children and they are absolutely fine with us helping her out. We also told them all that our will would be changed so that if anything happened to us she'd own the condo and the older children would get equivalent cash so all is fair.
Ok, let me have it....