Prevent IRS scrutiny. The current IRS annual gift tax exclusion is $14K per person. In order for an exchange of family funds to be considered a legitimate loan and not a potentially taxable gift, you must properly document the transaction in writing and your lender must also report earning interest at a rate equal to or above the minimum rate required by the federal government, called the Applicable Federal Rate (AFR). Even if you document the loan, but your lender reports earning less than the appropriate AFR, the IRS may impute the interest as income and also view the forgone interest as a taxable gift.
National Family Mortgage registers your loan with the appropriate government authority. This will allow you to legally deduct your mortgage interest payments from your federal tax return – just like with a bank mortgage. (You cannot legally deduct these interest payments on non-registered loans – even if the money is used to purchase a home.)
Proper documentation sets clear expectations and prevents future misunderstandings. Our optional loan servicing platform reduces awkward conversations, provides year-end tax statements for the IRS, and keeps everything business-like.
Traditional lenders usually require title insurance, appraisals, and lots of hidden fees. The Family Bank typically does not require such third party services or expenses. You can save thousands in closing costs with a National Family Mortgage.
A Low Interest Rate
Often, interest rates charged through intra-family loans are lower than rates charged through banks and traditional lending institutions. On average, National Family Mortgage interest rates are between one half to one full point lower than banks, and this can add up to thousands of dollars in interest savings over the life of the loan.
Odds are you will also provide your lender with a better return than most CDs or savings bonds available today. You will also be keeping money in your family. For down payment loans secured as a second mortgage, to primary financing or 100% financing, we have a solution that fits!
Better Deals on Homes
Borrowers with secure financing can move quickly and often negotiate better deals on homes.
You qualify as long as your lender trusts you can pay back the loan. A traditional bank loan application can take weeks of work and waiting with no guarantee of approval. You set the loan terms, (but, within our Standards.) Start saving today!
Using National Family Mortgage to help us establish a mortgage with our daughter was one of the soundest business decisions we’ve made.
– B&L, Texas (LENDERS)
My parents get a great return on their investment and I get a great rate on my loan. National Family Mortgage gave me all the tools to make it happen.
– Tom, Massachusetts (Borrower)
We used National Family Mortgage to help our daughter and son-in-law with their first home. It was an excellent experience and efficiently completed.
– Ann, Florida (LENDER)
With National Family Mortgage’s assistance, we were able beat the banks . . . Truly a Win-Win for our family.
– Ryan, Ohio (Borrower)
Having National Family Mortgage set up the loan and handle all of the details has been a Godsend. It is a total win-win for my daughter and me!
– Barbara, Virginia (LENDER)
Going with National Family Mortgage was the best financial decision we ever made. National Family Mortgage saved our family thousands of dollars.
– Robert, Nevada (BORROWER)
Setting up a family mortgage through National Family Mortgage was the easiest, most simple mortgage process I have ever experienced.
– Lana, Michigan (LENDER)
Our experience with National Family Mortgage was excellent. I would recommend this method of financing to everyone who is in a position to use it.
– PRB, California (LENDER)
Working with National Family Mortgage was seamless. I would highly recommend them to anyone interested in setting up a Family Mortgage.
– Chris, California (BORROWER)