patrick.net

Hey everyone,

We were ready to close on a $210,000 bank owned house, but have halted the close due to the fact our lender did not tell us we would be taxed 26% on the $80K we are gifting our father for his loan. We never knew about the gift tax. My father will be on the loan since me and my husband cannot be on the loan cuz we paid off all our debts and show 'no credit.' (We will be on title). My father has enough cash for the deposit, but we did not know the cash had to be in his account 2 months by lender's rules, so we 'gifted' him $80K out of our account. We will lose this house now due to this technicality, as there is no way we will pay tax on that money when reality is my dad has all monies for downpayment. (We will not go the 'lifetime' gift tax route). So, our only option is to buy the house with cash. But this would leave our family with only $14K left to our name in savings, and my father with only $18K left to his name. He owns a condo free and clear. We own nothing. We are nervous about not having enough monies to fall back on. We make only around $45K a year and my father only about $25K a year, plus he gets social security. The $210K house we might lose now sold for $568K in 2007, and is now appraised at $240K. We are getting a steal on the price, with equity in the house, so we hate to lose this house (it is 3800 square feet, gorgeous house). Is it too risky to buy since we are depleting most of our savings, or should we take the gamble knowing we could sell if we had too? All other houses listed in that subdivision are $259K, same model. Also, the house needs fixtures, blinds, and new carpet and paint.

Thanks.