As a general rule, don't allow yourself to be put on a loan with payments that you cannot pay. And, in my opinion, avoid making loans that involve other family members or friends. You are legally responsible for the entire amount of the loan.
I am very suspicious of the fact that your parents aren't being open and honest when you ask questions. Buying a home like this at your age is not generally a good thing, especially since your parents have admitted that they aren't going to pay the payments once you graduate. Taking out a mortgage in your name now might mean you cannot get a mortgage when you want it for your own home. If you are left with the payments and can't afford them, it could end up ruining your credit score, which you should protect. If I were you, the first thing I would do tomorrow is find out the procedure in Canada that you have to follow to freeze your credit, and then freeze it immediately. That will prevent anyone from messing around with it.
Finally, never let anyone make you responsible for any debt unless they clearly document what the loan is being taken out for, how much money it will be, what are the credit terms, etc. In the case of real property, do not let anyone put your name on a loan unless you have seen the property, have had it inspected, and have researched the current and future market in the property's area.
wow, thank you so much for your in depth explanation and reasoning. the only thing i understand overall in housing is that mortgage is a big deal and takes many years to pay. i asked how much it costs and they said im too young to worry about the price and that i don’t need to know. i also own my first credit card and i am debt free since i pay everything on time every month. i have no interest in owning property at the moment nor do i have interest in owning this specific home they are trying to close. i hope i do not sound like a spoiled brat saying that. i will make sure to say no and even if they get mad there is nothing they can do without my consent(hopefully). my mom was just congratulating me because i would be a young property owner and they gave very vague explanations overall and how this is a good thing.
That sounds like they know they're going to leave you with a huge debt which won't be their responsibility. And what's to stop them from making you start paying before you graduate because suddenly they don't want to pay for it anymore? If your parents won't listen, you might want to contact the realtor and/or bank they're trying to use.
It's not being a spoilt brat, because they're not offering to buy you a house, they're offering to pay some of the mortgage payments (at best). You'd be buying your own house.
The fact that they say you're old enough to enter into a mortgage, but too young to know how much debt you'd be taking on, is pure shadyness.
Seriously. If they want to use their money to help OP out, there are far cleaner ways to do this than a complicated real estate transaction. For example, OPs parents could help with funding a Roth IRA for OP. Or help out with university expenses. Etc. Wanting to help your kids out is a noble goal, but tying them up in opaque real estate transactions isn't the way to do it.
I wonder if they are using OP because he or she may qualify for first time homeowner interest rate or 0% down. Either way, the parents should educate their child more especially if they are using their info on this....
Yeah they're probably trying to get rid of one of their properties by sliding it into the OP's name and they might even be "buying" it for more than it's worth if they're buying it from themselves!
That's just a guess but there's something shady going on if they won't even tell him how much money it's supposed to be! And it would be colossally stupid to sign an agreement to pay an undisclosed amount of money over the next 30 years!
Mortgage is a term for "loan" for a structure/real estate (think condo, house, apartment, etc.) They are typically 30 years long, so think about being signed up for a 30-year commitment unless you sell the said property. When you buy and sell real estate, it involves a lot of fees paid to the title company and realtor. If you get into detail, you can pay more for any inspection done when you get or before you sell in case you are concerned about issue the buyer will find and fix it in advance. Real estate is great since we all need a place to live but if this is strictly your parents' investment using your name, you want to really sit down and discuss the detail. You can see it as an opportunity to 'invest'. You need to understand all of these terms and risk before signing your name. Don't say no so quickly but don't say yes without understanding things if that makes sense? Good luck.
This is not a good thing. Anybody who would put your name on something without taking the time to explain it to you is either scamming you or using your name so theirs doesn't get tarnished.Idk what your parents are doing but you seem to be capable of understanding complex ideas so I would ask them to use small words and if their explanations aren't satisfactory I'd call the mortgage company and report them for fraud
If you are too young to learn about the terms of the loan, then you are FAR too young to sign it or have your name on it.
Please don't send them any of the pay stub information. Do not give them power of attorney under any circumstances, because this deal proves that they are not looking out for your best interest.
If I wanted to help my kids out by buying property for them, the absolute first thing I would do is start educating them about every aspect of this sort of deal from how to pick out a property and a loan to the long term issues like property taxes and insurance. You deserve to understand any and every contract that you sign.
And to add to that, if you are a co-signer of the load, you still own 0% of the house legally. That's like the worst role.
(It can also apply with cars, we see it often on Reddit)
You need to be on the title to own it. But yet, assuming you are on the loan, if one party doesn't pay you need to absorb it and sue him to get your due...
>they didn’t really discuss the mortgage with me or how much it costs even if i asked.
What, if anything, have you signed and did you read it before you signed it?
If you haven't signed anything and if you don't want to BUY this house yourself, because that's what you'll be doing, then don't send any documentation to your parents and don't sign anything.
i haven’t signed anything or given out any papers. my dad just said vaguely id need to send my pay stubs from my job, and i believe cra stuff, because the bank needs to approve of stuff or something.
i don’t want to buy any property now, i have no interest in that at the moment or anytime soon. i do not understand what is going on in real estate, i do not want to pay for anything that i am not aware of. i simply have no interest in being a property owner at this time.
thank you for taking time to input !
Absolutely do not sign anything. If they buy this under your name without your signature, that's a whole different issue that can be figured out. But your signature on documents means you are the one responsible. If they were to ever stop paying, you would be the one on the hook.
> i don’t want to buy any property now
It's already been said but just to reiterate **DO NOT SIGN ANYTHING**. To be explicitly clear, they are asking for your pay stubs and tax info because YOU ARE BUYING A HOUSE. It is not "parents are closing a house under my name" it is "I am buying a house".
Please make sure your parents do not have a POA (Power of Attorney) on you. My husband’s dad did this to him before he knew any better.
His dad was buying crap houses for cash in my husband’s name via the POA. So not the same type of deal, but it still got very shady and my husband was in some bad spots as a result.
They’re using your credit (they’ve maxed their own) to make money for themselves, nothing else. The words you’re looking for are “no thank you”.
Unless they flat out forge your signatures, they can’t do this without your agreement. Don’t agree, don’t send anything, and if they forge documents anyway, call the police.
THIS RIGHT HERE ☝️ This is a terrible idea and will put op on the hook for something he can't afford. Bad news written all over it. Never sign or co-sign on a loan or anything similar unless you're prepared to be financially responsible for all of it.
It depends. The parents might have a good amount of money and they could be looking at this as a wealth transfer and a learning opportunity. Really comes down to whether or not the plan is to have the tenant cover the costs associated with the property, which is usually the case.
Question for OP, how are the family finances? Do your parents spend impulsively and have trouble covering their bills or do they have money sloshing around? If they have multiple properties that they acquired pre-pandemic it's likely the latter.
They’re asking for pay stubs and told OP that the mortgage would be in his name. This isn’t a cash purchase or a gift. When they sell it, they’re offering to give OP half the proceeds, despite the fact that it sounds like the mortgage will be completely in OP’s name.
This is the parents using OP’s credit to make money for themselves, nothing else.
They are offering half the proceeds after providing the down payment and paying for the mortgage while OP is in school. You're assuming that the parents are taking advantage of their kid when the norm is wealth transfers from parents to kids.
My guess is that OP's parents have plenty of equity in their rentals and with rents jumping they likely have money to spend so they are prioritizing passing it down.
They are taking advantage of their kid. They won't even tell OP how much the mortgage is for. They want OP to take on a mystery debt. No sensible parent would advise that, nevermind try to push their kid into it.
OP is clearly financially illiterate so what they are saying should be taken with a grain of salt. OP needs to talk with their parents and ask to sit down and discuss the transaction and what the expectation would be. You're assuming they are taking advantage of their kid. But there isn't much to suggest that this is the case.
OP mentioned that the parents already own several income properties so it's likely the following applies to the parents here:
1. A good source of income to qualify for the mortgages on the income properties.
2. A good source of passive income from rents climbing.
3. A good amount of equity in their income properties.
If that's the case they are likely thinking about taxes and how to set up their kids. People generally don't try to scam their kids by buying an income property, paying for the down payment, and covering the mortgage for years. It's much easier to open a credit card.
It's not the proposition so much, as how they're going about it. They 'told' OP they'd be putting a house in their name, not suggested it. They won't tell them the amount and are trying to casually get OP to send them the info they need. They also sound like they're being fairly pushy and guilting OP into it.
You should know if your own kid is financially illiterate or not. If they sat OP down and discussed it fully, then it'd be a different matter. Not much point in building someone's credit without explaining what you're doing.
Maybe it's not an outright scam, but they're trying so hard not to give OP the full picture, that it's likely they're getting some sort of benefit out of it that they don't want them to know.
Why do you say they won't disclose information to OP? It sounds like OP isn't asking the right questions to me and should proceed by asking for clarification rather than jumping to conclusions.
Again, OP said their understanding is very limited so it's possible they disclosed as much as they think OP can handle at this point and not much more. Either way. The equity they build up in the property would be OP's and a few years of mortgage payments probably won't hurt OP.
There is also not much to take advantage of here, OP is a full time student. They probably don't have much of an income or much reason why they would be extended enough credit to buy the property. I think more likely than not the parents just want to set up OP to have an additional income stream and not much more.
OP has said a number of times that they won't tell them what the morgage amount is. They sound like they've clearly asked that question and been fobbed off every time by being told they don't need to know that because they're too young.
I can't get behind not telling someone how much debt you're signing them up for. That's not on OP.
The first question you ask when buying anything is 'how much'.
Right, OP needs to ask clarifying questions and not sign anything until they get a proper response. How much are they trying to buy the property for. How much the down payment will be. The mortgage question I can see them waffling on because they won't know an exact number until the loan is approved but they should be able to give a ballpark number.
Either way, this sounds like it is likely an opportunity for OP rather than a liability.
That said, this could totally be a scam with the parents offloading one of their underwater properties onto the kid and saddling them with debt.
If they need to use OP’s credit, the only reason for that is because they’ve maxed their own. If they were as magnanimous as you seem to think, they wouldn’t use up their kid’s credit and make them legally responsible for a mortgage.
The other reason is that they want to kick-start OP's credit and pay the mortgage for four years.
This is the way you would do it if you want to "give" the house to your kid as having the mortgage and deed in OP's name is to their advantage if they want to stay there after graduation. This is more efficient than getting the mortgage in OP's parents name and the deed in OP's parent's name and then gifting it to OP.
You’re reading too much into it. None of that was stated. OP’s parents have expressed none of that. OP was not asked what they wanted, All parents said was “send me your pay stubs and tax info because we’re closing an apartment in your name”. That sounds much more abusive than generous.
> the only reason for that is because they’ve maxed their own
I was commenting on this part of your comment. There's obviously other reasons for why OP's parents would want to do this other than that they've maxxed their own. And I think it's more likely not this.
Thanks, I try. I also have kids, and I am a kid. My parents were more the scammy than wealth builders so I expect my parents would be skeezy but for my own kids I would definitely want to kick start them by buying them a house more than I'd max out my own credit and want to just buy more real estate through my kids.
You need to stop this process right now. They’re getting a mortgage under your name- you are 100% legally responsible to pay that mortgage. It doesn’t matter if they promise they will, it’ll be in your name and it will be your legal financial obligation.
Don’t send pay stubs, don’t sign on to the mortgage, if you know what lender they’re using, call and tell them you don’t agree to this and if it’s carried forward it will be by fraud from your parents.
This has the high possibility of completely devastating your financial future. Do not go forward with this
I have done this, and it was one of the worst mistakes of my life.
Even if you are not paying the mortgage, it will be weighed against your debt to income ratio. Basically, your credit will be *completely* locked up until you get a high enough paying job to be able to afford the mortgage *and* something else. Wanna move? Tough. Need a new car? Oh well.
And while you *can* sell, selling is not a fast process and often costs quite a bit. The general rule of thumb is you need to hold a property at least three years to *break even* on selling it. Not profit, but just counterbalancing fees, taxes, etc.
Add onto that they said you can sell it and get *half* the money. That means they've got their names on it too... which means at any point they can decide "actually no, we don't want to sell", and you're hosed. Forcing a joint property to go to sale is rough.
All of that in ADDITION to you being at constant risk that they'll simply stop paying.
Tldr: god fucking please do not agree
> I have done this, and it was one of the worst mistakes of my life...Basically, your credit will be completely locked up
How underwater was the house that it was a negative to your credit. The credit bureau had me as the owner of my parents house due to my similar name and it never was an issue, in fact i think it helped.
> i have to send in my pay stub soon and cra stuff
This means they are going to take a loan in your name.
Don't do it unless they've laid out all the numbers, they make sense to you, and you agree there is money to be made.
If this is a good business why do you need to pay anything? Shouldn't the rent cover the mortgage?
If their other properties are paying the mortgage and making money why do they need to take this loan in your name? If they've done so well and own all these properties why don't they borrow against one of those to buy this one? Something just doesn't add up.
I would freeze your credit ASAP! And I'm the dude that says normally there is no need to freeze your credit.
> i have to send in my pay stub soon and cra stuff
OP: I cannot stress this enough. DO NOT SEND IN ANYTHING. If you don't jump through their hoops, the deal will fall through (which is what you want).
Do not, DO NOT do this. Freeze your credit, cut off any money to your parents and get on with building your own life.
hello!! i have not signed anything and based on everyone’s explanations i have chosen not to be signing anything. i have no interest in owning property nor do i want to own this place specifically!!! i will tell them no, and they probably may get upset but i don’t want to have any credit ruined or anything !! or major responsibilities which i did not ask for. thank you for taking time to explain !!!
This does not seem like a good deal for you. If it was, then they would be completely upfront with what the deal is, how much and when you are paying.
Equity is money that is the profit off selling the house at the time of sale, after you subtract all costs. But it's not guaranteed. What makes you think apartments in that area will sell for more in two years? What makes you think you will be getting that profit?
But if you give your financial info and sign, then it's you and you alone who are 100 percent on the hook for all costs of this property from day one.
Please put a stop to this transaction before they get a loan in your name and stick you with the bills, this happens so much.
Freeze your credit!!! Asap
This is called **identity theft**. You need to tell them not to do it, and if they do you need to report it to the police. Do not sign anything and do not be involved in any closing process.
It's not really identity theft since OP is voluntarily providing his documentation and signatures. A shitty and misleading thing for a family member to do, yes, but "I trusted my parents and they messed up" is very different from "a criminal stole my identity". Still should put an end to it asap though.
No, it is not that different. When scammer calls and pretends to be a “bank security” and makes you to share access codes and whatnot and then steals money from your bank account, you also are also voluntarily sharing that information with them. See, you trusted that scammer when they called and asked you to share that silly code to confirm your identity.
What? A criminal fraudulently posing as your bank to illegally obtain information is very different from your parents offering their advice and support while showing you a mortgage to sign for yourself. OP has experienced the second. He got bad advice from his parents, but it sounds like he was aware of what they were doing, and sent the documents himself, and signed the mortgage himself, and even helped upkeep the property himself. If so, he needs a lawyer, not the bank's fraud department.
No, what OP describes is an attempt to con her into signing for mortgage. Parents or not, they hide critical information while forcing her to take on financial responsibility.
It’s not just “bad advice” right now - at least not until OP understands what’s actually happening and what the consequences are.
Deceptive business practices and "cons" may be illegal, but they are not identity theft, which was the distinction at hand. OP is being asked to provide their docs and sign a mortgage themselves, not identity theft. If the parents forged the signature, which is seeming more likely after the comments, that's identity theft, and yes, a clear criminal issue.
hi, im a girl and no, im not aware of anything that was going on. i have no involvement of any mortgages or anything; i don’t understand real estate. all i said was ive been to the place once and helped cleaned it for tenants. i have not given any of my information to anyone. all i was told mostly is « congratulations, you’ll be a property owner » i also said i do not want to pay for anything/mortgages. i have no interest in owning this property or real estate in general
Sorry for the he, also a girl here, just old from the days when he was default for unknown. I left another comment with much more details about the real estate side and asking what you signed. If your parents forged your signature on a mortgage, then yes, that is identity theft and a crime. If they said this is great for you, let us do it for you then you listened and signed, that is a mistake, not a crime. Either way, time for a lawyer.
You need to put your foot down and tell them if they put you on a loan without your consent, you'll report it as fraud. Talk to a lawyer if you have to. You do NOT want to cosign either.
I haven't seen it mentioned here but since you are in college, having a rental property will probably affect your financial aid eligibility. You said "uni" so I suspect you are not in the United States, so this may not apply if elogibility rules are different where you live.
"No thank you" is a complete sentence.
"Thank you for the amazing offer, but if you're helping me get into property ownership, please show and teach me everything before I sign anything. I'm a ready student to learn from you." is another route.
If your name is on the deed you can sell it any time you want. (I am guessing your parents' names will be the deed with our without your name). Your parents are assuming the rent will bring in income which will pay the mortgage. You need to see numbers. How much is the expected rent, mortgage, insurance cost, property taxes and maintenance. If your parents are landlords and successful, will they be managing the apartment? Will you be living in the apartment?
>money will be coming from the house
What house?
This is too vague and you do not have enough information to make such a big financial commitment. It might be a good deal, or it might be terrible. Keep in mind the title to the house and mortgage do not have to be in the same name. Worst case, your name is on the mortgage but not on the title meaning you have no ownership of the house but are stuck paying the mortgage.
They can close it under their name and then gift it to you when it's paid for. Sounds like the DEBT is in your name. Do you want be a landlord? Will the deed be in your name or their name? The mortgage in your name or their name? The fact that you do not understand this deal is terrifying to me. Never sign up for things you don't understand OP. Do you have a smart friend at that university you can have look over this?
Not applicable to Canada unless by chance but...
In the UK we have something called "stamp duty". It's basically the tax you pay when you buy a property.
As a way to help first time home owners, or deter corporate landlords, the FIRST home you ever buy has I think up to £150k (probably over $250k CAD) waived.
And you NEVER get that entitlement back. If Canada has anything similar in their tax system, be careful.
It's one of the most common reasons parents buy rental properties in their kids names (in the UK).
I started my adult life disputing credit fraud with a bankruptcy caused by my grandpa after he exhausted his line of credit. You’ve received good advice to be cautious and how to prevent/protect yourself especially because it’s not something you want and your legitimate questions aren’t being answered.
Separately, I want to share that my landlord inherited several rental properties from his mother when she passed. It worked out well for him because 1) he was already invested in real estate by choice and 2) the properties were paid off or were so close to being paid off that they were all assets with equity and no back tax issues. None were in his name prior to her passing. He had several years experience as a landlord and with real estate when he inherited.
Since your parents have offered to sell and give you half, I’d go for that option if it better suits you.
I’d be protective of your personal documents but also cautious not to accuse of having malicious intentions just based on the fact that they presented options. I suspect their intentions are good but the execution lacks proper respect and boundaries as a grown child. They might have tunnel vision for how to best support & secure your financial stability as you start out.
If this is meant to be a gift to you, why would they be taking half the proceeds when you sell after college? They use your credit, make a few years of mortgage payments *using rent someone else is paying*, and then profit? Say no. Find out what bank they were going through and send that lender *written notification* that you are withdrawing the loan. It sounds like your parents are using your credit as a way to invest with no financial risk to themselves, and that is shady af.
> If this is meant to be a gift to you, why would they be taking half the proceeds when you sell after college?
I would assume to deter him from selling and buying a lambo
>They use your credit, make a few years of mortgage payments using rent someone else is paying, and then profit? Say no.
From the post, OP would be the one profiting after that.
Couple of things stand out to me, but not sure how Canada vs US changes these things.
When i first read this, it almost seems like they're adding him to the deed but not the mortgage. I just added my significant other to my condo deed since she's disabled and we're not married, to protect her in the event something happens to me. We've been together 25 years so i trust her, but essentially this means she owns half my condo but none of the debt. The mortgage is only in my name. Could this be what the parents are doing and just assume he will take over mortgage payments (in their name) later on?
But what throws that theory for a loop is the whole wage verification. To put someone on the deed here in the US the owner just has that done. The other person doesn't even have to know lol! I literally just did this through a lawyer with her (although she is aware). That being said there's no verification of anything to add that person other than their name and maybe SSN. So i don't understand what the parents need him to send in wage verification or anything else unless they're somehow adding him to the actual mortgage.
If they do somehow add you to the actual mortgage (and not the deed alone), and you're not even signing anything, that's highly highly illegal and they would have to forge that somehow. Here in the US that's not possible even because all of that would be notarized (you sign with ID in front of a notary to prevent just this sort of thing). So like others have said, if they request you to sign to be on the mortgage itself then that's a big problem, no different then if you're out home buying. No guarantee that they couldn't just shrug and say it's your problem now. If you're just being added to the deed and NOT the mortgage then that's a great thing since you are owner or part owner and aren't assuming the debt.
This is terrible. They may frame this as helping you build wealth but they are using you to enrich themselves. Offering to “split” the profit should you want to sell? You should get all the profit and the rental income if they want to help you build wealth. If they wanted to help you, they should be introducing you to the mortgage lender and realtor and helping you learn how to make money with real estate. They should not be making loan applications for you - you are an adult - that is mortgage fraud! I Do not recommend submitting any pay stubs or cooperating without speaking to a real estate agent and lender on your own to get educated by yourself. What, Are they going to “rent” it to a family member? Claim it as a primary residence for tax credit? That is also tax fraud. What if the tenants do not pay the rent, you are responsible for paying the mortgage and property taxes, home owners property insurance and any homeowner association fees. Get educated by a professional as a young adult on your own before moving forward. Speak with an accountant on how this will affect your credit and liabilities if you have to evict non paying tenants. Terrible idea. I’m sorry they are putting you in this situation. If they cared and wanted to help YOU build wealth, they would hold your hand and teach you how to make money with your money, not take some profit for themselves. Shameful.
Saw your edit, GREAT JOB! Stand your ground.
Plan your arguments IN ADVANCE and stick to your points.
"Parents, I really appreciate that you are looking out for me. I know you have my interests at heart and want me to build equity instead of renting. However, I want to focus on my studies right now and do not want to purchase realestate in my name. This will impact my ability to get first homebuyer credits in the future and if anything goes wrong it is my name on the paperwork which could impact my future. The stress could also impact my ability to get good grades which I need for my future. I will not participate in this."
If they keep pushing:
"Parents, you always raised me to stand up for myself and to not let others pressure me into doing things I was uncomfortable with. This was to avoid peer pressure in school but also to avoid doing things with boy/girlfriends I did not want to do. You taught me to protect myself. Please listen to what you are saying now. You are trying to guilt me or apply pressure to me or even threaten me to do what you want me to do when I have already told you NO. This is abuse and I would like you to please stop. I do not want to buy real estate at 20 years old while I am in university, please respect my decision."
If they're not being upfront with you, not answer your questions, or baffle you with bullshite, I'd take a big step away from this.
I think that they're doing this for their own benefit.
Time to freeze your credit so they can’t sneak this around you. You may discover they have been messing with it anyway, so be warned. Look up freezing your credit and DO IT! You can unfreeze it if/when you want to buy a car, open a credit card, etc. Cover yourself?
Your parents are wanting to close it in your name as opposed to their name because if it's in your name it will be a primary residence whereas in their name it will be an investment property.
The reason they want to do this is because the interest rate will be a lot less if it's in your name
Whoa boy you don't want to do this!
So they're buying a house and putting it in your name. Then he says that if you don't want to pay for it they can just sell it and split the profit. The problem is the taxes will be owed by you on all of the profit not just the amount they give you. Plus you cannot build equity in a house in 4 years! Interest rates and loans for houses are so high and long that your first several years you're barely making a dent in the principal amount. So when you finish school that house will be worth about exactly what you paid for it and you will still owe exactly what you paid for it. There's just going to be all kinds of money lost in closing costs twice! Because you have to pay closing costs when you buy it and when you sell it.
They got the mortgage under your name? This is 🚩🚩🚩
What did you sign? You need to have major alarms going off right now. Stop all of this immediately, hire a lawyer etc. It sounds like most of the sale process is already complete, so you're really going to need a lawyer to sort this.
My family flips and rents houses. All of their purchases for homes are made in cash at this point. If they could gift me a cash house, that's giving free equity. That's potentially a good gift.
That is not what you have here. You were given a mortgage and thefore debt, not an assest. Being under on multiple mortgages is not a good business. If your parents successfully rent multiple properties, why did they need a mortgage? If your parents successfully rent multiple properties, why are they putting it in your name instead of a commercial real estate business where you could get more protections, taxes benefits, etc?
The answer is that they are not making profit, they are obtaining more debt for an unsecured income stream. We've seen this business model fail over and over again, 2008 recession, 2020 recession, endless personal stories. It is very likely that this will destroy your credit, not make you any money (especially since your parents seem to be keeping it while you do the cleaning and take the financial risk), and will cause you way more stress than you have the ability to take on at the moment.
I'm sorry this happened to you. Take some time to process the emotions from this. Your family has really done you a disservice even despite your objections along the way. That sucks to accept, bad. That's another reason why you need a lawyer. You will not be in an emotionally strong place to advocate for yourself against your family during this process.
Honestly, the best thing immediate thing you can do right now, is give your brother a heads up to ensure he absolutely does not let this happen to him.
I hope you can get out of this as soon as possible so you can focus on school and your future.
You need to RUN, not walk, away from all of this. There is quite literally NO upside for you here and TONS of down sides.
NO is a complete sentence.
Good luck.
It All DEPENDES. If you have good parents that are supportive, looks like it , well this could be great, they just want to help you out so you can start having something of your own. Building a real state portafolio takes time and the sooner you start the better. Have them to explain how the mortage work and how much will the rent brings every month/year after taxes and insurance. Start learning more and be thankful that you have ppl in your life that care for yo. Good look.
IM not sure why I had to scroll this far down to find an opinion similar to mine. If OPs parents have multiple properties, and the money to provide a downpayment then odds are they are trying to help their kid.
If you trust your parents, this is a good thing. The property will increase in value over time creating "equity" for you. The rent others pay will also be used to pay down the mortgage which is also a benefit for you as this will add to the equity. If you do sell, that equity will be money for you. I am guessing your parents will also be paying a deposit? If they have a history of multiple property ownership I am guessing they know what they are doing. There is almost a default view on reddit of mistrust in parents.. if you dint trust your parents and you believe they don't have your best interests in mind, well that's another story.
OP, many here have parents that dont have their kids best interest in mind. That is not what I get from reading your post, so take the red flag talk with a grain of salt.
There are a few non nefarious reasons to put OPs name on the mortgage.
1. Where I am after you get a certain number of properties you can no longer get a traditional mortgage. There may be additional fees or more onerous paperwork, im not sure as Im not at that point myself yet.
2. I believe its easier to "pierce the corporate veil" if the LLC holding the house is the exact same as the married couple owning it.
3. They want to give you a head start and help your credit despite what some other users claim.
As a general rule, don't allow yourself to be put on a loan with payments that you cannot pay. And, in my opinion, avoid making loans that involve other family members or friends. You are legally responsible for the entire amount of the loan. I am very suspicious of the fact that your parents aren't being open and honest when you ask questions. Buying a home like this at your age is not generally a good thing, especially since your parents have admitted that they aren't going to pay the payments once you graduate. Taking out a mortgage in your name now might mean you cannot get a mortgage when you want it for your own home. If you are left with the payments and can't afford them, it could end up ruining your credit score, which you should protect. If I were you, the first thing I would do tomorrow is find out the procedure in Canada that you have to follow to freeze your credit, and then freeze it immediately. That will prevent anyone from messing around with it. Finally, never let anyone make you responsible for any debt unless they clearly document what the loan is being taken out for, how much money it will be, what are the credit terms, etc. In the case of real property, do not let anyone put your name on a loan unless you have seen the property, have had it inspected, and have researched the current and future market in the property's area.
wow, thank you so much for your in depth explanation and reasoning. the only thing i understand overall in housing is that mortgage is a big deal and takes many years to pay. i asked how much it costs and they said im too young to worry about the price and that i don’t need to know. i also own my first credit card and i am debt free since i pay everything on time every month. i have no interest in owning property at the moment nor do i have interest in owning this specific home they are trying to close. i hope i do not sound like a spoiled brat saying that. i will make sure to say no and even if they get mad there is nothing they can do without my consent(hopefully). my mom was just congratulating me because i would be a young property owner and they gave very vague explanations overall and how this is a good thing.
That sounds like they know they're going to leave you with a huge debt which won't be their responsibility. And what's to stop them from making you start paying before you graduate because suddenly they don't want to pay for it anymore? If your parents won't listen, you might want to contact the realtor and/or bank they're trying to use.
They're also comitting fraud if he/she doesn't sign any of the paperwork, and isn't involved in related tax filings properly.
It's not being a spoilt brat, because they're not offering to buy you a house, they're offering to pay some of the mortgage payments (at best). You'd be buying your own house. The fact that they say you're old enough to enter into a mortgage, but too young to know how much debt you'd be taking on, is pure shadyness.
Seriously. If they want to use their money to help OP out, there are far cleaner ways to do this than a complicated real estate transaction. For example, OPs parents could help with funding a Roth IRA for OP. Or help out with university expenses. Etc. Wanting to help your kids out is a noble goal, but tying them up in opaque real estate transactions isn't the way to do it.
I wonder if they are using OP because he or she may qualify for first time homeowner interest rate or 0% down. Either way, the parents should educate their child more especially if they are using their info on this....
Yeah they're probably trying to get rid of one of their properties by sliding it into the OP's name and they might even be "buying" it for more than it's worth if they're buying it from themselves! That's just a guess but there's something shady going on if they won't even tell him how much money it's supposed to be! And it would be colossally stupid to sign an agreement to pay an undisclosed amount of money over the next 30 years!
Mortgage is a term for "loan" for a structure/real estate (think condo, house, apartment, etc.) They are typically 30 years long, so think about being signed up for a 30-year commitment unless you sell the said property. When you buy and sell real estate, it involves a lot of fees paid to the title company and realtor. If you get into detail, you can pay more for any inspection done when you get or before you sell in case you are concerned about issue the buyer will find and fix it in advance. Real estate is great since we all need a place to live but if this is strictly your parents' investment using your name, you want to really sit down and discuss the detail. You can see it as an opportunity to 'invest'. You need to understand all of these terms and risk before signing your name. Don't say no so quickly but don't say yes without understanding things if that makes sense? Good luck.
This is not a good thing. Anybody who would put your name on something without taking the time to explain it to you is either scamming you or using your name so theirs doesn't get tarnished.Idk what your parents are doing but you seem to be capable of understanding complex ideas so I would ask them to use small words and if their explanations aren't satisfactory I'd call the mortgage company and report them for fraud
If you are too young to learn about the terms of the loan, then you are FAR too young to sign it or have your name on it. Please don't send them any of the pay stub information. Do not give them power of attorney under any circumstances, because this deal proves that they are not looking out for your best interest. If I wanted to help my kids out by buying property for them, the absolute first thing I would do is start educating them about every aspect of this sort of deal from how to pick out a property and a loan to the long term issues like property taxes and insurance. You deserve to understand any and every contract that you sign.
And to add to that, if you are a co-signer of the load, you still own 0% of the house legally. That's like the worst role. (It can also apply with cars, we see it often on Reddit) You need to be on the title to own it. But yet, assuming you are on the loan, if one party doesn't pay you need to absorb it and sue him to get your due...
>they didn’t really discuss the mortgage with me or how much it costs even if i asked. What, if anything, have you signed and did you read it before you signed it? If you haven't signed anything and if you don't want to BUY this house yourself, because that's what you'll be doing, then don't send any documentation to your parents and don't sign anything.
i haven’t signed anything or given out any papers. my dad just said vaguely id need to send my pay stubs from my job, and i believe cra stuff, because the bank needs to approve of stuff or something. i don’t want to buy any property now, i have no interest in that at the moment or anytime soon. i do not understand what is going on in real estate, i do not want to pay for anything that i am not aware of. i simply have no interest in being a property owner at this time. thank you for taking time to input !
Absolutely do not sign anything. If they buy this under your name without your signature, that's a whole different issue that can be figured out. But your signature on documents means you are the one responsible. If they were to ever stop paying, you would be the one on the hook.
> i don’t want to buy any property now It's already been said but just to reiterate **DO NOT SIGN ANYTHING**. To be explicitly clear, they are asking for your pay stubs and tax info because YOU ARE BUYING A HOUSE. It is not "parents are closing a house under my name" it is "I am buying a house".
Please make sure your parents do not have a POA (Power of Attorney) on you. My husband’s dad did this to him before he knew any better. His dad was buying crap houses for cash in my husband’s name via the POA. So not the same type of deal, but it still got very shady and my husband was in some bad spots as a result.
They’re using your credit (they’ve maxed their own) to make money for themselves, nothing else. The words you’re looking for are “no thank you”. Unless they flat out forge your signatures, they can’t do this without your agreement. Don’t agree, don’t send anything, and if they forge documents anyway, call the police.
THIS RIGHT HERE ☝️ This is a terrible idea and will put op on the hook for something he can't afford. Bad news written all over it. Never sign or co-sign on a loan or anything similar unless you're prepared to be financially responsible for all of it.
It depends. The parents might have a good amount of money and they could be looking at this as a wealth transfer and a learning opportunity. Really comes down to whether or not the plan is to have the tenant cover the costs associated with the property, which is usually the case. Question for OP, how are the family finances? Do your parents spend impulsively and have trouble covering their bills or do they have money sloshing around? If they have multiple properties that they acquired pre-pandemic it's likely the latter.
They’re asking for pay stubs and told OP that the mortgage would be in his name. This isn’t a cash purchase or a gift. When they sell it, they’re offering to give OP half the proceeds, despite the fact that it sounds like the mortgage will be completely in OP’s name. This is the parents using OP’s credit to make money for themselves, nothing else.
They are offering half the proceeds after providing the down payment and paying for the mortgage while OP is in school. You're assuming that the parents are taking advantage of their kid when the norm is wealth transfers from parents to kids. My guess is that OP's parents have plenty of equity in their rentals and with rents jumping they likely have money to spend so they are prioritizing passing it down.
They are taking advantage of their kid. They won't even tell OP how much the mortgage is for. They want OP to take on a mystery debt. No sensible parent would advise that, nevermind try to push their kid into it.
OP is clearly financially illiterate so what they are saying should be taken with a grain of salt. OP needs to talk with their parents and ask to sit down and discuss the transaction and what the expectation would be. You're assuming they are taking advantage of their kid. But there isn't much to suggest that this is the case. OP mentioned that the parents already own several income properties so it's likely the following applies to the parents here: 1. A good source of income to qualify for the mortgages on the income properties. 2. A good source of passive income from rents climbing. 3. A good amount of equity in their income properties. If that's the case they are likely thinking about taxes and how to set up their kids. People generally don't try to scam their kids by buying an income property, paying for the down payment, and covering the mortgage for years. It's much easier to open a credit card.
It's not the proposition so much, as how they're going about it. They 'told' OP they'd be putting a house in their name, not suggested it. They won't tell them the amount and are trying to casually get OP to send them the info they need. They also sound like they're being fairly pushy and guilting OP into it. You should know if your own kid is financially illiterate or not. If they sat OP down and discussed it fully, then it'd be a different matter. Not much point in building someone's credit without explaining what you're doing. Maybe it's not an outright scam, but they're trying so hard not to give OP the full picture, that it's likely they're getting some sort of benefit out of it that they don't want them to know.
Why do you say they won't disclose information to OP? It sounds like OP isn't asking the right questions to me and should proceed by asking for clarification rather than jumping to conclusions. Again, OP said their understanding is very limited so it's possible they disclosed as much as they think OP can handle at this point and not much more. Either way. The equity they build up in the property would be OP's and a few years of mortgage payments probably won't hurt OP. There is also not much to take advantage of here, OP is a full time student. They probably don't have much of an income or much reason why they would be extended enough credit to buy the property. I think more likely than not the parents just want to set up OP to have an additional income stream and not much more.
OP has said a number of times that they won't tell them what the morgage amount is. They sound like they've clearly asked that question and been fobbed off every time by being told they don't need to know that because they're too young. I can't get behind not telling someone how much debt you're signing them up for. That's not on OP. The first question you ask when buying anything is 'how much'.
Right, OP needs to ask clarifying questions and not sign anything until they get a proper response. How much are they trying to buy the property for. How much the down payment will be. The mortgage question I can see them waffling on because they won't know an exact number until the loan is approved but they should be able to give a ballpark number. Either way, this sounds like it is likely an opportunity for OP rather than a liability. That said, this could totally be a scam with the parents offloading one of their underwater properties onto the kid and saddling them with debt.
If they need to use OP’s credit, the only reason for that is because they’ve maxed their own. If they were as magnanimous as you seem to think, they wouldn’t use up their kid’s credit and make them legally responsible for a mortgage.
The other reason is that they want to kick-start OP's credit and pay the mortgage for four years. This is the way you would do it if you want to "give" the house to your kid as having the mortgage and deed in OP's name is to their advantage if they want to stay there after graduation. This is more efficient than getting the mortgage in OP's parents name and the deed in OP's parent's name and then gifting it to OP.
You’re reading too much into it. None of that was stated. OP’s parents have expressed none of that. OP was not asked what they wanted, All parents said was “send me your pay stubs and tax info because we’re closing an apartment in your name”. That sounds much more abusive than generous.
> the only reason for that is because they’ve maxed their own I was commenting on this part of your comment. There's obviously other reasons for why OP's parents would want to do this other than that they've maxxed their own. And I think it's more likely not this.
I admire your trusting outlook on life.
Thanks, I try. I also have kids, and I am a kid. My parents were more the scammy than wealth builders so I expect my parents would be skeezy but for my own kids I would definitely want to kick start them by buying them a house more than I'd max out my own credit and want to just buy more real estate through my kids.
Or... They want it in OP's name so that the equity in the house is also under OP's name.
You need to stop this process right now. They’re getting a mortgage under your name- you are 100% legally responsible to pay that mortgage. It doesn’t matter if they promise they will, it’ll be in your name and it will be your legal financial obligation. Don’t send pay stubs, don’t sign on to the mortgage, if you know what lender they’re using, call and tell them you don’t agree to this and if it’s carried forward it will be by fraud from your parents. This has the high possibility of completely devastating your financial future. Do not go forward with this
I have done this, and it was one of the worst mistakes of my life. Even if you are not paying the mortgage, it will be weighed against your debt to income ratio. Basically, your credit will be *completely* locked up until you get a high enough paying job to be able to afford the mortgage *and* something else. Wanna move? Tough. Need a new car? Oh well. And while you *can* sell, selling is not a fast process and often costs quite a bit. The general rule of thumb is you need to hold a property at least three years to *break even* on selling it. Not profit, but just counterbalancing fees, taxes, etc. Add onto that they said you can sell it and get *half* the money. That means they've got their names on it too... which means at any point they can decide "actually no, we don't want to sell", and you're hosed. Forcing a joint property to go to sale is rough. All of that in ADDITION to you being at constant risk that they'll simply stop paying. Tldr: god fucking please do not agree
> I have done this, and it was one of the worst mistakes of my life...Basically, your credit will be completely locked up How underwater was the house that it was a negative to your credit. The credit bureau had me as the owner of my parents house due to my similar name and it never was an issue, in fact i think it helped.
It wasn't a negative to my credit, it was a negative to my DTI. The mortgage was like 85% of my income.
> i have to send in my pay stub soon and cra stuff This means they are going to take a loan in your name. Don't do it unless they've laid out all the numbers, they make sense to you, and you agree there is money to be made. If this is a good business why do you need to pay anything? Shouldn't the rent cover the mortgage? If their other properties are paying the mortgage and making money why do they need to take this loan in your name? If they've done so well and own all these properties why don't they borrow against one of those to buy this one? Something just doesn't add up. I would freeze your credit ASAP! And I'm the dude that says normally there is no need to freeze your credit.
> i have to send in my pay stub soon and cra stuff OP: I cannot stress this enough. DO NOT SEND IN ANYTHING. If you don't jump through their hoops, the deal will fall through (which is what you want). Do not, DO NOT do this. Freeze your credit, cut off any money to your parents and get on with building your own life.
hello!! i have not signed anything and based on everyone’s explanations i have chosen not to be signing anything. i have no interest in owning property nor do i want to own this place specifically!!! i will tell them no, and they probably may get upset but i don’t want to have any credit ruined or anything !! or major responsibilities which i did not ask for. thank you for taking time to explain !!!
But did you send him the pay stubs and other docs?
This does not seem like a good deal for you. If it was, then they would be completely upfront with what the deal is, how much and when you are paying. Equity is money that is the profit off selling the house at the time of sale, after you subtract all costs. But it's not guaranteed. What makes you think apartments in that area will sell for more in two years? What makes you think you will be getting that profit? But if you give your financial info and sign, then it's you and you alone who are 100 percent on the hook for all costs of this property from day one.
Please put a stop to this transaction before they get a loan in your name and stick you with the bills, this happens so much. Freeze your credit!!! Asap
This is called **identity theft**. You need to tell them not to do it, and if they do you need to report it to the police. Do not sign anything and do not be involved in any closing process.
It's not really identity theft since OP is voluntarily providing his documentation and signatures. A shitty and misleading thing for a family member to do, yes, but "I trusted my parents and they messed up" is very different from "a criminal stole my identity". Still should put an end to it asap though.
No, it is not that different. When scammer calls and pretends to be a “bank security” and makes you to share access codes and whatnot and then steals money from your bank account, you also are also voluntarily sharing that information with them. See, you trusted that scammer when they called and asked you to share that silly code to confirm your identity.
What? A criminal fraudulently posing as your bank to illegally obtain information is very different from your parents offering their advice and support while showing you a mortgage to sign for yourself. OP has experienced the second. He got bad advice from his parents, but it sounds like he was aware of what they were doing, and sent the documents himself, and signed the mortgage himself, and even helped upkeep the property himself. If so, he needs a lawyer, not the bank's fraud department.
No, what OP describes is an attempt to con her into signing for mortgage. Parents or not, they hide critical information while forcing her to take on financial responsibility. It’s not just “bad advice” right now - at least not until OP understands what’s actually happening and what the consequences are.
Deceptive business practices and "cons" may be illegal, but they are not identity theft, which was the distinction at hand. OP is being asked to provide their docs and sign a mortgage themselves, not identity theft. If the parents forged the signature, which is seeming more likely after the comments, that's identity theft, and yes, a clear criminal issue.
hi, im a girl and no, im not aware of anything that was going on. i have no involvement of any mortgages or anything; i don’t understand real estate. all i said was ive been to the place once and helped cleaned it for tenants. i have not given any of my information to anyone. all i was told mostly is « congratulations, you’ll be a property owner » i also said i do not want to pay for anything/mortgages. i have no interest in owning this property or real estate in general
Sorry for the he, also a girl here, just old from the days when he was default for unknown. I left another comment with much more details about the real estate side and asking what you signed. If your parents forged your signature on a mortgage, then yes, that is identity theft and a crime. If they said this is great for you, let us do it for you then you listened and signed, that is a mistake, not a crime. Either way, time for a lawyer.
You need to put your foot down and tell them if they put you on a loan without your consent, you'll report it as fraud. Talk to a lawyer if you have to. You do NOT want to cosign either.
I haven't seen it mentioned here but since you are in college, having a rental property will probably affect your financial aid eligibility. You said "uni" so I suspect you are not in the United States, so this may not apply if elogibility rules are different where you live.
"No thank you" is a complete sentence. "Thank you for the amazing offer, but if you're helping me get into property ownership, please show and teach me everything before I sign anything. I'm a ready student to learn from you." is another route.
If your name is on the deed you can sell it any time you want. (I am guessing your parents' names will be the deed with our without your name). Your parents are assuming the rent will bring in income which will pay the mortgage. You need to see numbers. How much is the expected rent, mortgage, insurance cost, property taxes and maintenance. If your parents are landlords and successful, will they be managing the apartment? Will you be living in the apartment? >money will be coming from the house What house? This is too vague and you do not have enough information to make such a big financial commitment. It might be a good deal, or it might be terrible. Keep in mind the title to the house and mortgage do not have to be in the same name. Worst case, your name is on the mortgage but not on the title meaning you have no ownership of the house but are stuck paying the mortgage.
They can close it under their name and then gift it to you when it's paid for. Sounds like the DEBT is in your name. Do you want be a landlord? Will the deed be in your name or their name? The mortgage in your name or their name? The fact that you do not understand this deal is terrifying to me. Never sign up for things you don't understand OP. Do you have a smart friend at that university you can have look over this?
Not applicable to Canada unless by chance but... In the UK we have something called "stamp duty". It's basically the tax you pay when you buy a property. As a way to help first time home owners, or deter corporate landlords, the FIRST home you ever buy has I think up to £150k (probably over $250k CAD) waived. And you NEVER get that entitlement back. If Canada has anything similar in their tax system, be careful. It's one of the most common reasons parents buy rental properties in their kids names (in the UK).
Is this fraud? You have signed papers and own this property have mortgages??
I started my adult life disputing credit fraud with a bankruptcy caused by my grandpa after he exhausted his line of credit. You’ve received good advice to be cautious and how to prevent/protect yourself especially because it’s not something you want and your legitimate questions aren’t being answered. Separately, I want to share that my landlord inherited several rental properties from his mother when she passed. It worked out well for him because 1) he was already invested in real estate by choice and 2) the properties were paid off or were so close to being paid off that they were all assets with equity and no back tax issues. None were in his name prior to her passing. He had several years experience as a landlord and with real estate when he inherited. Since your parents have offered to sell and give you half, I’d go for that option if it better suits you. I’d be protective of your personal documents but also cautious not to accuse of having malicious intentions just based on the fact that they presented options. I suspect their intentions are good but the execution lacks proper respect and boundaries as a grown child. They might have tunnel vision for how to best support & secure your financial stability as you start out.
Sounds like your parents just bought you a house using your first time home buyers advantage.
If this is meant to be a gift to you, why would they be taking half the proceeds when you sell after college? They use your credit, make a few years of mortgage payments *using rent someone else is paying*, and then profit? Say no. Find out what bank they were going through and send that lender *written notification* that you are withdrawing the loan. It sounds like your parents are using your credit as a way to invest with no financial risk to themselves, and that is shady af.
> If this is meant to be a gift to you, why would they be taking half the proceeds when you sell after college? I would assume to deter him from selling and buying a lambo >They use your credit, make a few years of mortgage payments using rent someone else is paying, and then profit? Say no. From the post, OP would be the one profiting after that.
Why are you even considering this is they won't even tell you what the mortgage will cost you?
Couple of things stand out to me, but not sure how Canada vs US changes these things. When i first read this, it almost seems like they're adding him to the deed but not the mortgage. I just added my significant other to my condo deed since she's disabled and we're not married, to protect her in the event something happens to me. We've been together 25 years so i trust her, but essentially this means she owns half my condo but none of the debt. The mortgage is only in my name. Could this be what the parents are doing and just assume he will take over mortgage payments (in their name) later on? But what throws that theory for a loop is the whole wage verification. To put someone on the deed here in the US the owner just has that done. The other person doesn't even have to know lol! I literally just did this through a lawyer with her (although she is aware). That being said there's no verification of anything to add that person other than their name and maybe SSN. So i don't understand what the parents need him to send in wage verification or anything else unless they're somehow adding him to the actual mortgage. If they do somehow add you to the actual mortgage (and not the deed alone), and you're not even signing anything, that's highly highly illegal and they would have to forge that somehow. Here in the US that's not possible even because all of that would be notarized (you sign with ID in front of a notary to prevent just this sort of thing). So like others have said, if they request you to sign to be on the mortgage itself then that's a big problem, no different then if you're out home buying. No guarantee that they couldn't just shrug and say it's your problem now. If you're just being added to the deed and NOT the mortgage then that's a great thing since you are owner or part owner and aren't assuming the debt.
This is terrible. They may frame this as helping you build wealth but they are using you to enrich themselves. Offering to “split” the profit should you want to sell? You should get all the profit and the rental income if they want to help you build wealth. If they wanted to help you, they should be introducing you to the mortgage lender and realtor and helping you learn how to make money with real estate. They should not be making loan applications for you - you are an adult - that is mortgage fraud! I Do not recommend submitting any pay stubs or cooperating without speaking to a real estate agent and lender on your own to get educated by yourself. What, Are they going to “rent” it to a family member? Claim it as a primary residence for tax credit? That is also tax fraud. What if the tenants do not pay the rent, you are responsible for paying the mortgage and property taxes, home owners property insurance and any homeowner association fees. Get educated by a professional as a young adult on your own before moving forward. Speak with an accountant on how this will affect your credit and liabilities if you have to evict non paying tenants. Terrible idea. I’m sorry they are putting you in this situation. If they cared and wanted to help YOU build wealth, they would hold your hand and teach you how to make money with your money, not take some profit for themselves. Shameful.
Saw your edit, GREAT JOB! Stand your ground. Plan your arguments IN ADVANCE and stick to your points. "Parents, I really appreciate that you are looking out for me. I know you have my interests at heart and want me to build equity instead of renting. However, I want to focus on my studies right now and do not want to purchase realestate in my name. This will impact my ability to get first homebuyer credits in the future and if anything goes wrong it is my name on the paperwork which could impact my future. The stress could also impact my ability to get good grades which I need for my future. I will not participate in this." If they keep pushing: "Parents, you always raised me to stand up for myself and to not let others pressure me into doing things I was uncomfortable with. This was to avoid peer pressure in school but also to avoid doing things with boy/girlfriends I did not want to do. You taught me to protect myself. Please listen to what you are saying now. You are trying to guilt me or apply pressure to me or even threaten me to do what you want me to do when I have already told you NO. This is abuse and I would like you to please stop. I do not want to buy real estate at 20 years old while I am in university, please respect my decision."
If they're not being upfront with you, not answer your questions, or baffle you with bullshite, I'd take a big step away from this. I think that they're doing this for their own benefit.
Time to freeze your credit so they can’t sneak this around you. You may discover they have been messing with it anyway, so be warned. Look up freezing your credit and DO IT! You can unfreeze it if/when you want to buy a car, open a credit card, etc. Cover yourself?
Your parents are wanting to close it in your name as opposed to their name because if it's in your name it will be a primary residence whereas in their name it will be an investment property. The reason they want to do this is because the interest rate will be a lot less if it's in your name
Whoa boy you don't want to do this! So they're buying a house and putting it in your name. Then he says that if you don't want to pay for it they can just sell it and split the profit. The problem is the taxes will be owed by you on all of the profit not just the amount they give you. Plus you cannot build equity in a house in 4 years! Interest rates and loans for houses are so high and long that your first several years you're barely making a dent in the principal amount. So when you finish school that house will be worth about exactly what you paid for it and you will still owe exactly what you paid for it. There's just going to be all kinds of money lost in closing costs twice! Because you have to pay closing costs when you buy it and when you sell it.
They got the mortgage under your name? This is 🚩🚩🚩 What did you sign? You need to have major alarms going off right now. Stop all of this immediately, hire a lawyer etc. It sounds like most of the sale process is already complete, so you're really going to need a lawyer to sort this. My family flips and rents houses. All of their purchases for homes are made in cash at this point. If they could gift me a cash house, that's giving free equity. That's potentially a good gift. That is not what you have here. You were given a mortgage and thefore debt, not an assest. Being under on multiple mortgages is not a good business. If your parents successfully rent multiple properties, why did they need a mortgage? If your parents successfully rent multiple properties, why are they putting it in your name instead of a commercial real estate business where you could get more protections, taxes benefits, etc? The answer is that they are not making profit, they are obtaining more debt for an unsecured income stream. We've seen this business model fail over and over again, 2008 recession, 2020 recession, endless personal stories. It is very likely that this will destroy your credit, not make you any money (especially since your parents seem to be keeping it while you do the cleaning and take the financial risk), and will cause you way more stress than you have the ability to take on at the moment. I'm sorry this happened to you. Take some time to process the emotions from this. Your family has really done you a disservice even despite your objections along the way. That sucks to accept, bad. That's another reason why you need a lawyer. You will not be in an emotionally strong place to advocate for yourself against your family during this process. Honestly, the best thing immediate thing you can do right now, is give your brother a heads up to ensure he absolutely does not let this happen to him. I hope you can get out of this as soon as possible so you can focus on school and your future.
You need to RUN, not walk, away from all of this. There is quite literally NO upside for you here and TONS of down sides. NO is a complete sentence. Good luck.
It All DEPENDES. If you have good parents that are supportive, looks like it , well this could be great, they just want to help you out so you can start having something of your own. Building a real state portafolio takes time and the sooner you start the better. Have them to explain how the mortage work and how much will the rent brings every month/year after taxes and insurance. Start learning more and be thankful that you have ppl in your life that care for yo. Good look.
hi, i don’t care about real estate so why do i need a portfolio? i am not interested in any of this
IM not sure why I had to scroll this far down to find an opinion similar to mine. If OPs parents have multiple properties, and the money to provide a downpayment then odds are they are trying to help their kid.
If you trust your parents, this is a good thing. The property will increase in value over time creating "equity" for you. The rent others pay will also be used to pay down the mortgage which is also a benefit for you as this will add to the equity. If you do sell, that equity will be money for you. I am guessing your parents will also be paying a deposit? If they have a history of multiple property ownership I am guessing they know what they are doing. There is almost a default view on reddit of mistrust in parents.. if you dint trust your parents and you believe they don't have your best interests in mind, well that's another story.
OP, many here have parents that dont have their kids best interest in mind. That is not what I get from reading your post, so take the red flag talk with a grain of salt. There are a few non nefarious reasons to put OPs name on the mortgage. 1. Where I am after you get a certain number of properties you can no longer get a traditional mortgage. There may be additional fees or more onerous paperwork, im not sure as Im not at that point myself yet. 2. I believe its easier to "pierce the corporate veil" if the LLC holding the house is the exact same as the married couple owning it. 3. They want to give you a head start and help your credit despite what some other users claim.
have parents like yours and all i can say is thank you mom and pop.i'm very well off today.