This Mother’s Day might be a bit less exciting than those in the past. With stay-at-home orders still in place throughout the country, Mom will only be able to be celebrated through a video call.
Taking her out to her favorite restaurant is out of the question. So, too, is going shopping to find her a nice gift. Amazon and flower shops may deliver, but that limits the personal touch Mom deserves.
If you think you’re running out of options, there’s one unique way to show Mom your appreciation. Paying someone else’s mortgage is a question that commonly arises for individuals advancing their professional career and looking to help the parents who have helped them along the way.
And this is possible, either in the form of one-time payments, or paying off their mortgage entirely.
The process of paying someone else’s mortgage completely
It’s the dream of many young adults to be able to relieve their mothers of the biggest financial burden they have: their mortgage. And for those who have found the success to be able to do so, a rapid solution to Mom’s lifelong woes might be tempting.
But paying someone else’s mortgage isn’t as simple as handing over your bank account information. Due to gift tax laws, you can only “gift” a certain amount of money in a given year to your parents before that money is taxed. Unless you like paying more than necessary, you should evaluate your options.
Don’t like overpaying? Yeah, neither do we.
How a mortgage loan originator (MLO) can help
If you thought buying a home for yourself was confusing, paying someone else’s mortgage might make your head spin. When purchasing a home from your parents, an MLO can walk you through the steps needed to pay less in taxes while getting the best value and terms.
The reason MLOs can quickly and easily help you with these options is because most loan originators use an automated network. This network allows them to search and find the best loan options all within one screen. They can then show you the best route to paying off Mom’s mortgage.
Making a one-time payment on Mom’s house
COVID-19 has thrown a wrench in everyone’s financial plan. If your parents are still working, they might have been affected by the coronavirus closings. Maybe they were let go from work.
Baby Boomers between the ages of 50 and 69 make up 33% of all American homeowners. If Mom falls into this category, chances are she’s pretty close to having her home paid off. Yet one rough period without an income, such as the one happening to so many now, could cause her loan to default.
Although foreclosures have been put on hold during the pandemic, Mom’s monthly payments are still accruing. Once the economy gets back to normal, she’ll need to figure out a payment plan with her mortgage company.
Paying someone else’s mortgage with a one-time payment is also a possible form of relief. And can help to alleviate the short-term financial hardships your parents may be going through.
Getting ready to work with an MLO to purchase Mom’s home?
At Wemlo, we’re processing with a purpose. And that purpose is for both the MLO and the homebuyer to be able to collaborate and communicate effectively. Get real-time updates on your loan’s status through a shared portal and never be left in the dark.