(Closed) Inheriting a house

posted 6 years ago in Home
Post # 3
Member
750 posts
Busy bee
  • Wedding: November 2012

@MrsJVP:  I haven’t been in your exact situation re: inheriting, but if you don’t like the neighborhood and the house won’t be big enough, you really should plan on a move. It would be different if you liked the neighborhood and wanted to stay – then by all means, give the rebuild option some consideration. But if it’s not WHERE you want, then it doesn’t matter if you build a dream home, you’re still not in the right place.

Side note – how very generous of your parents! Hopefully if your folks don’t mind the idea of you knocking down the house, they won’t mind the idea of you just selling it.

Post # 5
Member
1137 posts
Bumble bee
  • Wedding: September 2010

There are a lot of issues that go along with what your parents want you to do.

You will have to pay taxes on the value of the house if they sign it over to you, which could amount to tens of thousands of dollars.

You also cannot take out a loan on a house and then knock it down. The bank is using that house as collateral and if you destroy it, they no longer have that value as back-up, so to get a home equity loan, you need to guarantee that you will not alter the value of the property for the negative. If you can get a loan on the land, that may be an option, but these are very difficult loans to get and usually have high interest rates.

Also, for a construction loan, you need a 30% down payment. Most people don’t have the 20% recommended to BUY a house let alone 30% to BUILD, so that’s also something to consider.

For the sake of keeping your lives simple, I’d thank your parents for the offer of the house but turn it down. It probably comes with way more strings and headaches than you’re even aware of. Get something on your own that you can afford or rent until you’ve saved enough.

Post # 6
Member
5761 posts
Bee Keeper

You need to also check into the construction codes where the house is located. Sometimes you can’t even knock them down and rebuild on anything other than the original foundation/footprint, making expansion for something else impossible.

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