Prevent IRS scrutiny. The current IRS annual gift tax exclusion is $14K per person. If your relative simply transfers the deed to their home over to you, the IRS may treat the fair-market value of the property as a taxable gift. In order to prove the exchange of value is not a taxable gift, but a legitimate loan, your relative must properly document their offer of “Seller Financing” and also report earning interest on the loan at a rate equal to or above the minimum rate required by the federal government, called the Applicable Federal Rate (AFR). Even if they document the loan, but report 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 ® coordinates the government registration of your loan with your closing attorney, title company, or escrow company that will generate the new deed. This will allow you to legally deduct your mortgage interest payments from your federal tax return – just like with a bank mortgage.
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 often require private mortgage insurance (PMI), require Lender’s 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 of dollars 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 help the lender spread out taxable capital gains on the property. Plus, you’re keeping money in the family!
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)