My in-laws are a few years retired in Virginia and their finances are modest. They are wonderful people and worked hard their whole lives (and raised a great family), but they never made a lot of money and saved very little and now live on their social security. Their rent has gone up a lot the last few years, and my spouse and I have been helping them make rent, which they’re understandably unhappy about, because they don’t want to feel like a burden and don’t want to be in the vulnerable position of relying on someone else to ensure they have a place to live. We recently had a conversation with my spouse’s two siblings about how to improve the situation, and the most popular idea was to pool our resources for the down payment on a condo and we’d all also cover the monthly mortgage/taxes/insurance once the place is purchased. My spouse and I would probably pay something like 50-60% of the down payment and monthly costs, with the siblings contributing smaller proportions. All of us already have mortgages on the homes we live in. Eventually, when the parents can no longer live alone or pass away, we’d sell the property and distribute the proceeds pro rata and that’d be the end of it.
The plan seemed simple and sensible in principle, but now the details are bogging us down. Does it make sense for all the siblings to apply for the mortgage collectively? Or is it actually easier as a tax matter for my spouse and I to apply for the mortgage and the siblings pay us their proportions directly? Alternatively, it might be tax-advantageous for my in-laws to actually purchase the home, but we co-sign as guarantors and we and the siblings actually provide the money. I’m trying to figure out what is the least costly and least complicated way to purchase, own and eventually sell a property where multiple people are financing it, but none of the finance providers are the ones actually living in the home. I expected to find some sort of guide or article online from similarly situated people, but I didn’t find anything. Can anyone on this sub point me to a guide like that, or potentially comment on how they’ve managed this type of arrangement?
Everyone involved here is pretty sensible and we know that this type of situation can evolve over the years and become a point of tension as peoples’ finances change, and we’re anxious to avoid those issues by confronting them now, but it’s hard to get a handle on the universe of things we should be discussing.
Grateful to everyone for thoughts!
submitted by /u/123thanks321
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