Assumption of my Fathers mortgage

[godisalwaysnear]

Reaching out to just hear thoughts and opinions. I know the right answer is to talk to a loan officer/RE agent/Lawyer.

But my father is 80. He lives of social security and inflation has pretty much wiped him out to where he can’t buy groceries anymore. So I’ve been looking into different ways to either

A) purchase the house from him for the reminder he owes (80k is what is owed, 100k was the original sale price).

B) Doing an assumption of the mortgage.

C) Just paying cash and being doing with. Obviously this isn’t ideal as I’d rather put that cash to work elsewhere.
but it’s a still a possibility

I want to do an assumption just for ease. But he is using VA loan. Which from what I have read is assumable. But since I’m active duty I’m worried that would be denied because I would not “intend to occupy” even though that address is my permanent home record. His rate is also 3% which I would prefer to keep lol

With all this he would still be living there. I would not. So I don’t even know if any of this is possible.

 

[srseekinghim]

@godisalwaysnear Also, do not hire a real estate agent for this transaction. There’s no need to pay commission. Hire a lawyer to draw up the paperwork.

Source: I’m an agent

 

[kitty346]

@godisalwaysnear There is information on loan assumptions starting on page 23 of https://www.benefits.va.gov/WARMS/d...to_Process_VA_Loans_and_Submit_them_to_VA.pdf

 

[godisalwaysnear]

@kitty346 Awesome resource thank you!

 

[l86]

@godisalwaysnear Ask an expert about any Medicare or Medicaid implications. There are rules for lookback period to prevent seniors from redistributing assets then claiming for long term care expenses etc

 

[l86]

You could just pay mortgage for him and wait to inherit it with stepped up basis. But if he has other debts or goes into assisted living under Medicaid they'll want to recover assets from the estate. And thats why its key to make sure you aren't running afoul of the Medicaid eligibility rules and potentially putting him on the hook for very expensive medical or long term care. This is much more important to determine first rather than whether it is technically feasible to assume the loan.

 

[chiliman]

@l86 In this case he isn't transferring the asset, OP is taking over payments. You are, however, correct: for the purposes of Medicaid even if the father signs over the title since there is a 3 or 5 year lookback the house will be counted as an asset. However, I believe that in most states the primary residence is not considered for Medicaid eligibility.

 

[l86]

@godisalwaysnear Other things to consider:

What other veterans benefits or local outreach programs is he eligible for?

Did he ever file for VA disability (many older vets didnt unless severely injured my Dad is one)?

If he can't afford food/shelter without your financial support, perhaps military dependent status is an option.

 

[harldav]

@godisalwaysnear Not picking on your dad at all I promise.

But. It’s a good lesson for anyone reading this, get as much money into retirement as you can. It will pay off in the long run.

 

[kitty346]

@godisalwaysnear On a semi related note, Military One Source offers free consultations with elder care experts. Maybe they could help with additional resources.

Has he talked to the local VSO or area agency on aging? Has he applied for SNAP or utility assistance? Does he have debt other than the mortgage?

 

[peter_aka_00avenger00]

@godisalwaysnear Put social security into margin account, buy QQQ, take margin loan to pay bills. Repeat process. This will stretch your money.

 

[ribble382]

@godisalwaysnear You could possibly assume it. Talk to his mortgage company.

Yes you need to intend to occupy it. Cant be used as a rental. When the underwriter sees where you are stationed and the distance that would be an issue