My husband and I currently own a house with ~$150K of equity in it, and ready to buy bigger with the equity and purchasing power. We are looking at purchasing and renovating a house and my Dad is willing to help us through the process financially so that we can stay in our current home while we remodel as we have three small children. We aren't sure how best to proceed.
The house we are currently in was purchased by my Husband before we were married, and my name is not on the loan. I could most likely use my income to purchase the house alone, ~$350K (would I have to count the current mortgage in my ratios since it's technically my Husband's?) and have my Dad fund the ~$150K renovation and we pay him back the equity once recived from the sale of current house? Have him gift me any variance in down payment I need to get out of PMI. This is all approximate so if equity is lower and renovation higher I'm not able to roll this into the loan at this point.
Have my Dad buy the house (cash or financed) and pay for the renovation and we buy from him when everythign is done? He would obviously like to keep as much cash in the bank as possible as it's earning him interest- I believe part of the cash is liquid and part would be coming from his 401K- he does not pay penalities at this point for withdrawing.
Have him gift us the approx equity upfront and we buy the house and home equity loan all on our own? We're worried about gifting limits/taxes here and the higher interest rate on the home equity loan.
Can I buy the house with my Dad? So the money isn't gifted?
We live in Texas, our combined income is $255K, my middle mortgage score 720, husbands 800. Our budget max all in is $550K and our current mortgage payment is $1200/month, $800 car note, $500 other monthly debt. We have about $30K in liquid savings that we could float but would like to keep that in tact and use just our equity. There wouldn't be any issues with my Dad qualifying or purchasing in this range.
Open to any guidance or suggestion, I know that was a lot of questions. Thanks in advance!
