More over you will be pre-approved based on requiramnts in US. All of the money you will receive from your parents will be as a gift. You just have to prove these funds witha letter.
To answer your questions, yes you can apply for a mortgage in the US using downpayment funds that came from a foreign country. Whether the downpayment came from the sale of the property or from gifts, the mortgage company will need to know where the money came from.
There are two tax issues to consider, one is property taxes which is deductible and you can claim the amount paid against your income. The second tax benefit you should consider is the $7500 tax credit for first time homebuyers. Should you have questions concerning it you could contact Rob Craig at FireDream. His number is 469-252-3600 in Dallas. He's one of the best in the business and can explain these tax issues to you.
I'm not a tax attorney or a CPA. Please be sure to talk to one or both of them before making any decision on a complicated matter like this.
You will still be able to claim the house as your homestead & take advantage of the tax benefits. I assume that when you say your parents will save on taxes, you are talking about in their country not here.
I'll be happy to discuss further with you if you wish to give me a call.
I suggest you contact Marcus McCue at Guardian Mortgage 972-248-4663. I have many international clients and after going round and round and round with many, he's the one that allows handles everything quickly and efficiently and never with a problem in my epxerience. There must be tricks to these kinds of loans sometimes and what will work and what won't so he must know most of the tricks. One of the only lenders too that I've seen be ready two weeks early.
As far as the taxes....I don't think there is any savings for them on the US side, but perhaps in their home country as far as the sale and purchase is concerned. They'd need to check with their tax advisor there. We do have a similar provision in the US that certain profits from the sale of a home are expempt if reinvested in a primary residence within 2 years. We also have 1031 exchange savings if exchanging investment real estate. But that would apply perhaps to future purchases not this one I suspect.
The only other tax savings I can see is if they will now use this home as their primary residence and not as an invesment they can perhaps claim an over 65 years of age exemption on the property taxes if they are over 65? There are rules on residency so we'd just need to check your expectations. The other way to perhaps save taxes is gift/estate taxes depending on the size of their estate. If less than $1million it may not matter, if over $1million it might matter if they become residents here. The idea with that is they can gift you each year up to a certain limit like $10,000. So for example you buy a $500,000 home, they provide you $100,000 as downpayment. They can perhaps gift you $10,000 for the next 10 years to perhaps avoid some estate taxes. Now I am not a tax attorney, attorney or tax specialist and neither are most mortgage lenders, so depending on the size of the gift and the size of their estate and where they plan to live are probably the next questions to consider. There can be some negative consequences to this type of arrangement too, if they are not giving you the money but want to consider it as an investment. There are larger withholding requirements when you sell a home if you are a non-resident, and if there is little appreciation you could be forced to deposit money with a title company in order to sell the house, so some of these ideas might also depend on how long you intend to stay in the home, the price of the home, the amount of the investment by your parents and by you and your thoughts on appreciation. If you don't have a realtor yet, call me at 214-675-6992. I have many international clients and have often worked through a number of these situations.
1. My first question was if I could apply for a mortage where part of the down payment was coming from another country as described in my question. (Thanks Mr. Hitchings, I'll contact Mr. Hewitt)
2. The Tax benefits - given that I am a first time home buyer with pretty much no idea of how property taxes work, I wasn't sure how I should go about this entire process. Do I speak to a mortage consultant first, to a tax lawyer first, to an accountant? Ms. Wagner, I guess I was looking for how and where to start.
Or are you trying to save on taxes here in the U.S.? And which ones - income or property taxes? If you're trying to save on your income taxes, then you need to talk to a tax accountant. If you're trying to save on your property taxes, I don't see where anything you've mentioned is applicable.