Can I get a mortgage on a house I own?
I am recently out of grad school and I have a good paying job. I also just bought a house from HUD. Since it was a cash bid and I don't have much saved yet, my dad gifted me the money which I then used to pay for the house. The plan now is for me to take out a mortgage to pay him back right away. I'm a little confused as to how to do that though since, legally, I already own the house. I have heard of people getting second mortgages so I guess it's possible. So can I get a mortgage on this house? Or would I have to use some kind of home equity?
Referring to the answer-er who mentioned paying the 20% down, I know you have to do that when using a mortgage to purchase a new home outright. But my understanding was that the 20% went towards the purchase of the HOME, not the MORTGAGE. But since I technically own the home already, it does not seem to me like the 20% would be necessary since they'd essentially be giving it right back to me. Please let me know if I'm wrong on that point.
"You can give up to the annual exclusion amount ($13,000 in 2009 and 2010) to any number of people every year, without facing any gift taxes. Recipients never owe income tax on the gifts. And you can give up to $1 million in gifts that exceed the annual limit—total—in your lifetime, before you start owing the gift tax. If you give $15,000 each to ten people in 2009, for example, you'd use up $20,000 of your $1 million lifetime tax-free limit—ten times the $2,000 by which your $13,000 gifts exceeds the $12,000 per-person annual gift-free amount for 2009."
So while the gift is more than $13,000, The tax doesn't kick in until you are $1 million OVER the limit of $13,000 per person. Meaning, my dad could give $13,000 to a million people, $13 million, and because none of those gifts was over $13,000, there is no gift tax.
So he won't owe any gift tax.
Also, I'm not clear on the reverse mortgage either. Would anyone like to elaborate on that?