Our grandfather, who’s 88, has lived in his house since 1964 and wants to stay there as long as he can. Unfortunately, he’s run out of money and is in debt due to my grandmother’s prolonged illness. He’s asked me to buy his home and let him live there until he passes. My brother, 27, earns about $40k a year and lives with our parents. He’s saved up $4k but thinks he can manage most of the mortgage payments with occasional help from me, as I’m the only one in the family with disposable income. The house is old but spacious and well-located. I’m considering several options to make this work, like gifting the down payment, financing the house and renting it to him, or paying cash and setting up a low-interest loan for him. I want to make it easy for him to afford the home, but I also need to limit my own financial exposure. Looking for advice on the best way to proceed!
Check the 5-year Medicaid Look Back period if long-term care might be needed. This could impact your plans.
Cedar said:
Check the 5-year Medicaid Look Back period if long-term care might be needed. This could impact your plans.
He’s adamant about not going into a nursing home. We’ll consider this and possibly talk to an estate lawyer to protect his assets.
@Taliesin
Many say that but end up needing nursing care anyway. It’s vital to ensure that asset transfers don’t affect future Medicaid eligibility.
Azriel said:
@Taliesin
Many say that but end up needing nursing care anyway. It’s vital to ensure that asset transfers don’t affect future Medicaid eligibility.
That’s a valid point, thanks for the advice.
A gift of equity could work well here. I saw a similar situation where an aunt gifted equity to cover the down payment and closing costs.
Adi said:
A gift of equity could work well here. I saw a similar situation where an aunt gifted equity to cover the down payment and closing costs.
The house appraised well above the sale price.
Adi said:
A gift of equity could work well here. I saw a similar situation where an aunt gifted equity to cover the down payment and closing costs.
So with a gift of equity, grandpa wouldn’t need to provide cash, right? Because he’s out of funds.
Does your brother actually want to own a home? Remember, owning a home involves maintenance costs too.
Eli said:
Does your brother actually want to own a home? Remember, owning a home involves maintenance costs too.
He does want to own the home. I’m ready to help with maintenance costs as needed. Hopefully, his financial situation improves with time.
A gift of equity might be the simplest solution here, especially if your grandfather has enough equity. This way, your brother could potentially own the home without upfront cash.
Mai said:
A gift of equity might be the simplest solution here, especially if your grandfather has enough equity. This way, your brother could potentially own the home without upfront cash.
Remember, a gift of equity isn’t applicable if the property isn’t owner-occupied.
@Tatum
That’s a good point. The specifics of occupancy would need to be clarified.
It’s wonderful that you’re considering helping your family like this. I’ve done similar and it’s very rewarding.
Freddie said:
It’s wonderful that you’re considering helping your family like this. I’ve done similar and it’s very rewarding.
Thanks for your kind words! Hoping it all works out.
Consider a reverse mortgage. It might be a suitable option given your grandfather’s situation.
Mixing finances and family can be tricky. Maybe set up a trust for the property and lease it to your brother, allowing him to eventually buy it for a nominal amount if he meets all conditions.
Casey said:
Mixing finances and family can be tricky. Maybe set up a trust for the property and lease it to your brother, allowing him to eventually buy it for a nominal amount if he meets all conditions.
I’m willing to consider any costs as a gift to avoid complicated family dynamics. Thanks for your input!
Confirm all details, like whether there’s an existing mortgage and the terms of the sale. A life estate might be an option to ensure your grandfather can stay in his home.
Mai said:
Confirm all details, like whether there’s an existing mortgage and the terms of the sale. A life estate might be an option to ensure your grandfather can stay in his home.
The house has a mortgage from a cash-out refinance, and we’re considering purchasing at the loan payoff amount. Thanks for the suggestion on a life estate, I’ll look into it.