So I borrowed against my home to buy my father’s home because he is low income and needed help. Since the loan is against my primary home, I can’t count it against the second home, correct? I owe nothing on the second property. It is actually low value, about $75k. Is the only real solution here is to borrow against the second home and refinance my primary residence?
How much in assets is “too much” and going to really cause problems?
thanks.
No, you can’t. The loan is secured by your primary home, so it reduces the equity in that home.
Since you own the second (non-primary) home with nothing owed on it, you must report the full fair market value as an asset, unless the situation changes.
It is harder to borrow against the second home since it is non-owner occupied. You can try, but it might take some time to locate a lender.
Remember the advice to not do anything for college financing that you wouldn’t normally do like buy or sell stock, move assets, borrow. It might help you for FA but will usually cost you in interest or taxes.
thanks all. I think my income bumps most of it anyway. wish the form let you report debt. really odd they don’t look at that.
If you think about it for a minute, it’s not at all odd. Why should the parents who have maxed themselves out with consumer debt be given relief for that on the FA forms?