Real Estate News From Around The World February 9, 2012

Can I Get A 1 Percent Mortgage From My Parents? Question: Answer: A 1 percent interest rate raises some concerns. If the market interest rate is 8 percent, for example, and you are paying 1 percent, then we do not have a fair market interest level. The interest not paid -- the missing 7 percent -- may well be regarded as income to your parents. This income can be taxable, even though no cash is being received. The IRS publishes an applicable federal rate which shows the interest borrowers should pay so lenders can avoid taxes on interest income not received. A tax professional can explain how this works and the proper rate for a given loan. Written by Peter G. Miller. © 1997 Peter G. Miller. All Rights Reserved. Rules, Disclaimers & Notices. Click here for a printer-friendly version of this article. Click here to translate this page to another language. Copyright © 2012 Realty Times. All Rights Reserved. Send Us Your Comments