My mom and I are going to buy a house together. I asked her with the plan of taking out a mortgage for half. She decided she wants to buy it outright with cash and gets very upset with me if I mention that I should get a mortgage (I don't have much cash left after the down payment). I can understand why she would want to do this, but are there any legal issue or tax (neither of us itemize) to watch out for. We don't want to set it up as a loan, but I will in effect pay her 'rent', but my name will be listed on the deed as a co-owner.

So what is your question?

You can't take a mtg. out for half of it. If she can buy it with cash then there will be no mtg.

If she does that and the two of you live there together, then you might consider drawing up a contract with her for you to pay X amount per month in consideration for her adding you to the deed.

It is possible that whoever is on the deed will start itemizing deductions to get the best tax benefits.

What is the price of the house?
How much are the real estate taxes?

It is only a $95,000 condo. I already put $2200 down. Mom put 2550 down. We only have about $90,250 left at closing if the second lender accepts our offer. Of course we are having it inspected. I will probably pay for that. Neither of us will itemize, because we just don't have enough to make it more than the standard deduction. I will think about the contract. It seems a bit formal for us, because we are both honest and don't fight about finances. It just threw me for a loop because knowing she wants to move hear and I only qualify for a $59,000 mortgage I asked her with the terms of me paying for half (i.e. getting a mortgage) My brother wants her to pay for the whole thing and my mom gets mad when I bring up me getting a mortgage. She definitely wants to put me on the dee(both of us) I can see the sense in paying cash if she can, but she is using taking out CD early ($1,000) penalty. She keeps telling me "don't worry about it" In the long run I guess we will save in interest and closing cost, but I don't want her strapped for cash.

Oh real estate taxes are $1700 a year.

How did the two of you put $4750 down if there may not be a loan?

Who did you give this money to?

... Neither of us will itemize, because we just don't have enough to make it more than the standard deduction. ...
At present. If there was a mortgage, that would change the amount you could deduct.


... I will think about the contract. It seems a bit formal for us, because we are both honest and don't fight about finances. ...
If you want to keep it that way (no fighting), put it in writing. Written agreements are for honest people too. Hand-shake deals have a way of going sour because:

people can forget what was said
oral understandings tend to be one person understands one thing and the other person understands another
there may be situations that come up which no one anticipated; and
if one of the parties dies, it is difficult to impossible for others to know what was agreed to.



... my mom gets mad when I bring up me getting a mortgage. She definitely wants to put me on the dee(both of us) I can see the sense in paying cash if she can, but she is using taking out CD early ($1,000) penalty. She keeps telling me "don't worry about it" In the long run I guess we will save in interest and closing cost, but I don't want her strapped for cash.
Consider giving her a mortgage for your half interest. That way there need not be any interest and closing costs, yet (depending on how it's structured), you may still qualify for the tax deduction.

If she wants to put you "on the deed" to avoid probate, there are other ways to structure the deal.

It is held in trust with Re-Max until closing. It is a short-sale so the deposit showed we had good faith to purchase

Thanks