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Best way for Grandma to protect home?

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  • Best way for Grandma to protect home?

    My 82 year old Grandma is a widow whom me and my husband currently live with in her home. She wants us to "buy" the home from her while she is still competent. The idea is to transfer the home into me and my husband's name and eventually pay the estate for the value of the home, around $115,000.

    The problem is that her health is not the best, so gifting is not an option, b/c of the 5 year lookback period if she had to go into a nursing home. The other problem is that we cannot afford to outright buy the home from her right now, we only have one income. Once my hisband completes his Masters, we will be able to pay for the home, but we want to take care of this now while she is still somewhat healthy. What other options do we have? We also want to add onto the house and would use the equity in the home to pay for an addition.

    Could we just buy the home for a cheaper price, say $85,000, and have grandma pay for the addition out of her proceeds from the sale, or is that considered a gift too? Could she give us money back from the sale to apply towards the mortgage balance or is that considered a gift?

    What would happen to her home if she kept it in her name and she died or had to go into a nursing home?

    Any help is greatly appreciated!

  • #2
    Get an attorney to help you draw up mortgage papers with grandma as the lender.

    Owner financed home buying happens all the time. Grandma can create any payment situation she feels comfortable with.

    For instance, she can make your payments very low for the next two years and then move up to a more market equitable rate after that.

    However, that would mean you have no equity in the home whatsoever.

    You don't get to possess the equity of a home you don't own.
    Not everything that makes you mad, sad or uncomfortable is legally actionable.

    I am not now nor ever was an attorney.

    Any statements I make are based purely upon my personal experiences and research which may or may not be accurate in a court of law.