This is NOT a real estate question - real estate agents can only answer real estate questions, unless they are also licenced as a lawyer or CPA.
You need to pose tax questions a tax accountant (CPA) and the title questions to a real estate lawyer.
I might be wrong, but I believe that 2011 annual exclusion for tax-free gifts remains $13,000 per donor. A giver may make an unlimited number of $13,000 gifts, as long as they are to different individuals.
In other words, your Mother can give you $13,000 tax free.
Of course, as Mother she CAN finance the entire purchase for you as long as she pays cash.
If you choose to use a lender to finance your purchase, your Mother would have to sign a GIFT LETTER that she does NOT expect the money to be paid back - lenders want the gift to be a TRUE gift, otherwise the additional loan (to your Mother) would change your debt-to-income ratio.
As for the Title, it is strictly between you and your Mother. One can finance the purchase and NOT be on the Title AND one can be on the Title without financing the purchase.
You and your Mother should have a Legal document written by an experienced real estate lawyer that clearly spells out your rights and obligations to protect both of you. I know, it is your Mother and you are her son, but human relationships do tend to go sour occassionally, especially if you change your status from single to married.
Again, you need to contact tax accountant and real estate lawyer for advice.
With interest rates as low as they are right now, why put down such a large down payment and leave yourself a little liquid? I would consultant a lender to see what kind of rate and downpayment they would recommend.
It is great to hear that you are looking to buy a house.
It may be prudent to put say 25-30% down and get yourself a nice
Low rate loan at 3 to 4 percent.
Sure you can get your mom to loan you the money, that is done all
The time. If it is documented as a loan properly, there will not be any taxes.
I'm not even sure it's a good idea for you to put $120,000 down on a $200,000 property. That's tieing up a huge amount of cash in an illiquid asset. You say "I will still be a little liquid."
It depends on your finances as well as your risk tolerance, but a financial advisor might suggest you be more than "a little liquid."
Also, ask the tax advisor about that "0%" interest. I know that in some cases the IRS will use "imputed interest." So even if some document says "0%," the IRS will assign a more realistic number to it.
Hope that helps.
This is a complicated question and there are certainly pros and cons for doing it either way. If you need a referral to a real estate attorney for your title questions or a CPA for your tax questions, let me know.
Regarding any competitive offer situations that you may run into, it does help to have a cash offer - you will most likely decrease the number of properties that you have to bid on before being successful by not having a loan.
Also, as far as your mom qualifying for a first-time home buyer program - most of the programs I have run across consider a person to be a first-time home buyer if they haven't owned a home for three years. Also, I'm not sure that the first-time home buyer programs that are available would be of use to your mom? Most of them are aimed at allowing zero or lower downpayments. And sometimes, there are grant programs which have income caps. I would research what is available for first-time home buyers before worrying too much about what your mom may be missing out on. A loan officer can help you with this.
This is a question for your tax advisory, as my colleges already mentioned here the annual exclusion for tax-free gifts remains $13,000 per donor, you have to weigh your options here, in the other hands interest rate remaing really low and you still have the benefict of interest tax deduction.
A tax professional may be able to offer an alternate solution, but I think anything where her name is not on the title will be considered a taxable gift.
Here is a blog about title isues that you might find helpful:
NOTE: For tax and legal advice always contact experts in those fields.
"A gift letter will include the name of donor, the name of the recipient, the relationship between the two parties, the amount of the gift, the address of the property for which the gift is to be used to pay for, the fact that no repayment is required or expected, and an assurance that the person making the gift or the source of funds is not in any way party or beneficiary to the transaction, e.g. not the broker, seller, agent, loan officer, builder and so on. In most cases the person giving the gift will be required to document where the money came from, such as a bank account or a brokerage account."