Purchasing a home for cash and trying for mortgage later?

pjjames · Joined: 11 May 2010 Posts: 1

Hey everyone. I'm currently in the process of purchasing a home. I was pre-approved for a fairly large mortgage but am now in a place where I will most likely be forced to pay cash. I have about $350,000 in funds that I was planning on being the downpayment ANYWAY, but now with where I'm at, I can't get a $250,000 mortgage on my own because with my current income I do not show a two year history....which has really been the deal breaker. My parents have agreed to cosign and are in a position where their debt to income ratios look good, but my father has a commercial loan that even though it doesn't show on his credit report, it does if you're doing a background check which most lenders are apparently doing these days. We still haven't received a final word but it's getting down to the wire where we have to close in about 20 days. He is willing to basically give me a loan for $250,000 but we'd like to be able to get HIM a mortgage of whatever sort on that money right away so that he can reinvest it within 60 days so there are no tax implications. Is it possible to receive a cash-out sort of mortgage right away and what's the best way of going about it? Thanks for your advice ahead of time.

ethanwhite · Joined: 15 Apr 2010 Posts: 1

In regards to tax implications, if you don't borrow any funds and the property remains a PPOR then no implications. If you turn iinto an IP at a later date then you would have no interest costs available to deduct. How this affects you would be determined by your own personal situation at that point in time. I hope this helps a little.