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Old 07-10-2013, 11:02 AM
 
8 posts, read 7,506 times
Reputation: 13

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Hi everyone,

I saw there's a thread similar to this one but my situation might be a bit complicated and I need help.

I'm looking to buy my first property which is located in Los Angeles, CA. I know lenders rely on tax returns line 37 to determine if you're eligible for a loan.

My tax returns don't reflect my income. My parents are not US citizens and they live in Europe. I get my funds from my parents which is considered as gift and is not taxed, at least that's what my tax preparer who works in H&R Block says. And H&R Block has prepared and submitted my taxes for the last 5 years and I never experienced any problems from IRS or form anyone else at all.

Now the question is: Since my tax returns don't reflect any income, how can I become eligible to borrow? Is there any way around this? What are my options? I can prove my income from my checking account activity. My credit score is around ~ 760 and I don't owe any debt.

I really appreciate your help. Thank you so much!!!
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Old 07-10-2013, 01:13 PM
 
Location: Plano, Texas
1,673 posts, read 7,008,907 times
Reputation: 697
You don't have any options for getting a mortgage. As you said, your tax returns show you make no income. No income, you cant qualify.
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Old 07-10-2013, 01:32 PM
 
Location: Living on the Coast in Oxnard CA
16,289 posts, read 32,270,302 times
Reputation: 21891
I thought that their are yearly limits on gift amounts that can be given to anyone including a family member. If that amount is $10,000 and I thought that it was, how would you be able to pay the mortgage anyway?
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Old 07-10-2013, 01:44 PM
 
Location: Long Island
9,926 posts, read 23,090,299 times
Reputation: 5902
Quote:
Originally Posted by SOON2BNSURPRISE View Post
I thought that their are yearly limits on gift amounts that can be given to anyone including a family member. If that amount is $10,000 and I thought that it was, how would you be able to pay the mortgage anyway?
Currently, the gift tax limit is $14,000 per person, so her parents can give her $14,000 each = $28,000

In the U.S., the recipient is not taxed, regardless of the amount; the gifter is taxed for amounts above the annual limit, but not a the time the gift is given, since there is a lifetime exclusion ("simple" explanation).

In many other countries, the gifter has NO tax consequences, but the recipient pays taxes on the gift.

So, if the OP's parents live in a country where the gifter pays no taxes on the gift and the recipient is a U.S. citizen who has not tax liability - is there truly a transaction where no taxes are due?? Interesting
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Old 07-10-2013, 02:34 PM
 
Location: OH>IL>CO>CT
7,490 posts, read 13,540,408 times
Reputation: 11853
You need to contact a mortgage broker. There are loan programs for self-employed or free-lance situations. The fact the money is "gifted" may not be good enough. (Unless maybe the money is actually coming from a documented trust fund).

You might need to think about having parents buy the house, and get mortgage, in their name.
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Old 07-10-2013, 06:31 PM
 
Location: Irvine
15 posts, read 44,281 times
Reputation: 20
are you a student?

if you are in the US as a foreign student you WILL NOT qualify for a loan.
I know this 100% for sure, this same scenario just came up for me last thursday.

You may be able to get a hard money loan, your rates will be higher and you will have to put down a decent chunk of change for a down payment.

There are 1-2 possibilities

Evan
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Old 07-10-2013, 06:42 PM
 
Location: Raleigh, NC
19,397 posts, read 27,703,839 times
Reputation: 36050
Nope, it's a gift. Your parents can decide to stop gifting you money at any time. Period. End of subject.

Unless you want to go the hard money, high interest, serious stupid route.

HOWEVER, if you can save enough to put 40% or more as a down payment, keep a credit score above 780, AND show significant assets that are available to you, you may be able to work some magic with some lenders.
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Old 07-10-2013, 06:52 PM
 
8 posts, read 7,506 times
Reputation: 13
I'm not a student, I'm a legal resident. Elke Mariotti explained perfectly: "So, if the OP's parents live in a country where the gifter pays no taxes on the gift and the recipient is a U.S. citizen who has not tax liability - is there truly a transaction where no taxes are due??" NO TAXES ARE DUE period!

Anyways that's not the question. Is there anyway to work around this and get a mortgage? I can show pretty decent documentation that I also own couple of properties in Europe but not in the US.

What do you think guys? Thank you!
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Old 07-10-2013, 07:50 PM
 
Location: Brentwood, Tennessee
49,932 posts, read 59,754,614 times
Reputation: 98359
Sell the European properties and pay cash.

You can't get a mortgage with "no" income.
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Old 07-10-2013, 07:54 PM
 
8 posts, read 7,506 times
Reputation: 13
Quote:
Originally Posted by Wmsn4Life View Post
Sell the European properties and pay cash.
I'm sorry but that is the worst investment advice I've heard in my lifetime.
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