Cori Carl found it difficult to get a home loan from a bank in 2011, partly because she worked as a freelance marketing consultant and banks weren’t too generous with loans to freelancers, who typically have an unsteady income.

Carl, then 26, was ready to buy a co-op apartment in Brooklyn, and thought she was in a good position to qualify for a mortgage from a bank. She had a large down payment, great credit, a steady income and long-term clients, she says. She was still turned down.

With a $60,000 down payment in hand for a $235,000 apartment she wanted to buy, Carl turned to her mother for a $175,000 private mortgage with her mom acting as the bank. Her mom had the money sitting in her checking account from a land sale she recently completed, and agreed to the loan at the then-market interest rate of 3.75 percent for 25 years in a fixed-rate loan.

«I feel better paying my mom interest, rather than a bank, and it seemed unlikely that she would foreclose on me,» she says.

From full loans from parents to down payment assistance that’s documented as gifts, there are ways for parents to help their children buy a home if they can’t get a loan from a bank or need some extra money for a down payment. All have their own rules and legal ramifications, along with tax implications, that can make wading through them difficult.

And many people do need the assistance from mom and dad. A survey by mortgage services firm Digital Risk found that 46 percent of first-time homebuyers in the last 12 months received help with a down payment from family. (más…)

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