I found this post and it is very helpful thank you! I just have a few questions you may be able to explain. First off, here is what I am trying to do: My parents are having financial issues due to my mother's ongoing cancer battle and are scared they are going to "lose" their house. They currently have $100,000 (for easy calculations) left in a mortgage. The home is approximately worth $250,000. The goal is for me to take ownership of the home and them to get out from their mortgage. I was under the impression that I need to get approved for the loan at 250k and purchase the house at that price. Then my parents would gift over 150k making my end mortgage 100k? Are you saying that I actually would take a mortgage out for 100k and then receive the difference (250k-100k = 150k) as a gift of equity? If this is true, would that 150k gift go and pay off the mortgage? How can the gift of equity be more than the mortgage amount? Additionally, if we are using the above example, no taxes would be paid because the gift is lower than the lifetime maximum (~$5mil) only required forms would have to be filed?
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