Gift of Equity in exchange for freeing parents of Mortgage.

[Tommy Carey]

My parents are retirement age and my father has had to continue to work despite his declining health to pay off the remaining 100k of a refinanced loan they took. They want me to take over the loan and in exchange will take possession of the title for the house (I would likely inherit it anyway.) The house is worth about 500k now. I've never had a mortgage, I rent, and have little savings (less than 20k.) How can I free them of their payments while accessing the Equity for a loan to buy into an income property in my home city of Los Angeles (a duplex starts at 900k?) Also, If I could find a good ROI, how can I insure my parents can stay in the home and that I am able to accelerate my lack of savings. I have a California Real Estate license.

[Stephanie Medellin]

@Tommy Carey  You should be able to get an owner occupied loan with better rates when refinancing your parents home.  Fannie Mae has an exception for occupancy when a son/daughter buys or finances a home for a parents who are unable to work or unable to afford the loan on their own, so you would not have to live there with your parents.

You will have to qualify for both their housing payment (the mortgage) as well as your housing payment (even if you currently rent), but the payments should be reduced quite a bit if there's just 100k remaining.  

I do know that Texas has some rules regarding cash out on owner occupied properties, but you would probably need someone licensed in Texas to explain those options to you.  

This would leave the option for an FHA loan open to you if you decide to buy a duplex in LA, and you would qualify as an owner occupant.