Home Buying in 22312>Question Details

Lacurls, Both Buyer and Seller in 22079

my husband & I currently own a home but we also would like to purchase a townhouse for our son.are there legal restrictions in VA?

Asked by Lacurls, 22079 Sun Sep 12, 2010

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Answers

16
There are no "Legal" restrictions..you can buy anything you want for your son. I am sorry some are telling you to seek legal counsel..as that is simply a waste of money in answering your question directly.

The real question may be...what's the best way to buy a property for my son..In that case there can be a few variables and perhaps an attorney or estate planner/tax adviser could provide some quality insight. If you wish to discuss I am happy to meet with you and give you the questions you might need to make the best decision. I have done a few of these and structured them a few different ways. You may find after meeting that you have the answers you need. Some are quite simple!

Have a great day and feel free to contact me.

Kind Regards,

Erik J. Weisskopf, ABR,CDPE,CRS,GRI
Erik@AskMeAboutHomes.com
703.216.1222
1 vote Thank Flag Link Mon Sep 13, 2010
No there isn't any restrictions. Will the mortgage be in your sons name? Because if the mortgage is in your name than it would be considered an investment property. The downpayment on an investment property is more then using it as your primary residence.
1 vote Thank Flag Link Sun Sep 12, 2010
Lacurls,
In terms of "legal restrictions" we'd have to know what type of restrictions you're referring to and whether or not your son would be the primary purchaser. In simple terms, yes you can purchase a townhome for your son, or with your son, as long as you qualify for the loan in addition to your current mortgage(s) if any, or are paying cash. If your home is in the same region as the townhouse and your son is not the purchaser (you can be a co-signer), the townhouse can be considered an investment property and you could incur investor interest rates on a mortgage loan. As Kathy noted, the FHA option might be a good one to investigate. This is something to discuss with your lender when pre-qualifying.
It's still a great time to pick up well priced properties in VA and interest rates are extremely low, so go for it!
And, of course, if you aren't already working with a realtor, I'd be happy to assist.
0 votes Thank Flag Link Thu Oct 14, 2010
There aren't any legal restrictions but there are several avenues you can take. One thing to consider would be purchasing with equity you currently have. Many of my clients have refinanced their current home to purchase another home without having two separate mortgages ( one being for an investment property ) in the end. This is a very subjective option and may not apply. Your lender can give you the best advice.
Web Reference: http://www.wsrealtor.com
0 votes Thank Flag Link Tue Oct 12, 2010
Erik,
Would it make your day if I told you that - I - gave you the thumbs up :-)

I must have a very magnetic personality, the air is dry, my computer is hyper-sensitive, or some other reason.
This is especially true when sending e-mails - it is enough for the cursor to be on the 'send ' button and the pad gets activated, which is why I always put the address as the last to prevent sending uncompleted e-mails.

Anyway, your THUMBs UP comes from me - I have a very vivid memory of it as it happened . If anyone else tries to claim it, they are not telling the full truth :-)
0 votes Thank Flag Link Tue Sep 14, 2010
Vivianne,

this is NOT the forum to debate me. If you wish to do so..contact me personally and I will be happy to give you a better understanding of my answer.

I did answer the question directly..can she buy a home for her son..Yes...legal restrictions NO..of course if he is not of age..He cannot have sole ownership...does this mean she can't buy it for him..NO..could be a trust etc. Again..I answered the question as it was presented.


THANKS TO WHOEVER GAVE ME THE THUMBS UP! Lyn Got the thumbs up too...same answer..No Restrictions!

Have a great day!

Kind Regards,

Erik J. Weisskopf, ABR,CDPE,CRS,GRI
0 votes Thank Flag Link Tue Sep 14, 2010
" I am sorry some are telling you to seek legal counsel..as that is simply a waste of money in answering your question directly.

The real question may be...what's the best way to buy a property for my son..In that case there can be a few variables and perhaps an attorney or estate planner/tax adviser could provide some quality insight."
***********
Erik,
Didn't you just refer Lacuris to an attorney or estate planner/tax adviser yourself???

And I am glad you did because REALTORs cannot give advice outside the scope of their license.

Exclusive Right to Represent Buyer Agreement is very clear on that:

10. DISCLAIMER. The buyer acknowledges that the Broker is being retained solely as a real estate agent and NOT as an attorney, tax advisor, lender, appraiser, surveyor, structural engineer, mold or air quality expert, home inspector or other professional service provider. The Buyer is advised to seek professional advice concerning the condition of the property or concerning legal and tax matters. (...)

Needless to say, the scenario posted by Lacuris can have serious legal and tax consequences.
0 votes Thank Flag Link Mon Sep 13, 2010
I have done many such deals in the past, every deal is different, but it is not a problem here in VA.

Good luck and would be happy to refer you a good lender for doing this.

Ray Baumann
0 votes Thank Flag Link Mon Sep 13, 2010
Just a couple of questions/thoughts - will you son be signing the contract and be on the deed/deed of trust. He needs to be over 18 to sign the contract. If all of you are to be mortgage applicants and are on deed/deed of trust, you will be crossing generational lines and that may have tax ramifications, so you may wish to discuss with your accountant. For further, discussion, pls contact me.
0 votes Thank Flag Link Mon Sep 13, 2010
No legal restrictions to buy for a family member. You will buy the home as an investment property -and will have to put down between 20 and 30 percent.

Lenders will consider this an investment property - even though you are buying for a family member.

The larger the down payment - the lower the fees and closing costs.

Besides the large cash outlay - there are few restrictions.

Good Luck!

Gerry Dunn
Associate Broker
Licensed in Maryland, Virginia and D.C.

301-651-8600
0 votes Thank Flag Link Mon Sep 13, 2010
Lacuris,

Why not contact the lender that you plan to use for the VA loan and ask the question directly? There is no fee for the consultation.

You will have to decide how you want to hold the title to the property. The following articles may be helpful to you:
http://viviannerutkowski.wordpress.com/2009/05/04/title-to-r…
and
http://viviannerutkowski.wordpress.com/2009/06/01/risks-and-…

NOTE: For a legal and tax advice always contact experts in those fields.
0 votes Thank Flag Link Mon Sep 13, 2010
Hi Lacuris

Likely the best option will be to do an FHA loan. This would though require that you and your son be on the mortgage. You would be the "non-occupant co-borrower". If you can go FHA it would not be considered an Investor loan since you son (an owner) is living there. If your son cannot be on the mortgage than yes this will likely be an investor loan which tend to be at a higher interest rate and require a large downpayment. A lender can tell you if you and your son together qualify for an FHA loan. If you have to do it on your own it will likely be considered an investor which means a higher down-payment needed and a higher interest rate.
Hope this helps.
Feel free to contact me if you want to discuss it further

Kathy Stark
Weichert, Realtors
703-201-9656
kathystark@weichert.com
0 votes Thank Flag Link Mon Sep 13, 2010
Bluntly put, we real estate agents are not qualified to answer your question, since we are not qualified to give legal advice. It seems to me that you need an attorney, or a firm of attorneys, who are knowlwdgable in both real estate and tax law. I think that there are possible mine fields here. You might want to check out the Collins firm ( practicing in DC, MD, & VA ), or, in Old Town Alexandria, an attorney who has helped some of my clients in the past, John J. Brennan III, 510 King St., 703-548-1620.
0 votes Thank Flag Link Mon Sep 13, 2010
The only restrictions could be qualifying for two mortgages. If the townhouse will be only in your name and your husband's name then it would be considered a rental property and you mortgage rates will not be as low. Feel free to contact me if you have further questions!
Web Reference: http://www.jimmccowan.com
0 votes Thank Flag Link Mon Sep 13, 2010
No legal restrictions at this time.
Doug Kuhn, Broker
GW Realty
since 1974
703-362-7108
0 votes Thank Flag Link Sun Sep 12, 2010
There are not restrictions on the pirchase. However, your loan options are different since it will be viewed as an investment property. Do you have time tomorrow that we could discuss your intentions over the phone? I could then assist you further with your plan for your son. I look forward to hearing back from you.

Jack Shoptaw
TTR Sotheby's
0 votes Thank Flag Link Sun Sep 12, 2010
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