Parental Loan?

Question

how common is it to get a loan from a parent, for buying a house?

we found our dream house, it's gorgeous and in the perfect location, but I have no credit and that means I have bad credit, right? I can't cosign, so I was thinking... my mom is wealthy, and I have been pondering asking for a loan of 35k, at a 2% interest rate. If we get this 35k, we can afford this home no problem. I'd pay back the loan in full within 7 years.

Is this a normal thing to ask a parent? I'm a little nervous asking just because to me, it's a lot of money, but to her it isn't a huge deal. I was never spoiled so I realize how much money this is and how lucky I would be to be loaned it. Am I being selfish asking for the loan?? how can I ask her for this, she intimidates me a bit but this home is just perfect and I want to give it a shot.

ETA: She easily has the money in cash.

I want to write it all down on paper, my income and how I can afford it. Paying her back is not going to be an issue, and I am going to get a credit card in the next few weeks no matter what. I realize now how important credit is!!!

I have just seen so many friends get in serious debt over them, I thought I was being responsible steering clear. Guess not lol.

I've worked out the mortgage and what I think we will need for lawyers and closing costs. I think I will make another question about it because we have only bought a house before, not bought AND sold.

ty!

Answer 1

Ask your mother for the loan but tell her you will pay the going interest rate. Perhaps she will then offer to lower the percentage.

Answer 2

Well for starters does your mom have the money in cash? Or does she need to finance it in her name? She always has the option of putting you on a land contract which is a legal document stating that you will pay what amount and what percent due on what day of the month. However this would not go on your credit as good or bad credit. You need to get a credit card or maybe have your mom co-sign a car loan or personal loan from the bank to start building your credit. No credit is worse then bad credit.
The worst she can say is no right?!
Explain to her abou the house the financial part explain to her that you are responsible enough to pay it backbut ou can not get a mortgage. Ask her what you should do, maybe if she could help you. Maybe the est approach would not be "mom can i have $40,000.
You also have to remember there will be home insurance and closing cost, and title cost plus your taxson the home. Make sure you can well afford this by using less than 50% of your income.
Be prepared when you aproach her to ask. Maybe write it out on a piece of paper how you have figured you can afford it monthly. Show all your bills and what you make.

Good luck!

Answer 3

Don't ask your mother for the loan. Simply visit her and, during the course of conversation, inform her that you have found your dream house, etc., but you just can't get financing and REALLY wish there were a way for you to somehow get the house.

You will have placed the ball in Mother's court, and she will be in a position to offer financing IF she wants to. Her response to your comments will tell you whether or not she is interested in providing the monies you seek.

Answer 4

Wow! If my daughter came to me with that, I think I would be quite impressed! Ask her! If you understand the significance of the amount, and she intimidates you, well I'm led to believe that she is already proud of you and you should not hesitate to ask. Best of luck!