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We (parents) would like to have an in-law suite builded onto our childrens home and pay for addition.  What type of loans are available.

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EricsMimi, cmagnum above had a good suggestion about moving to Independent Living. Depending on your age, physical health and memory health, you might find moving to a 55+ community a better choice if your budget can handle it. There is so much to keep you busy there. And you would be around people closer to your own generation.

Does your grown child live in an area where it would be easy to apply to zoning for an addition? Or would variances be needed if the property line is too close? That would take months in the making just for that alone. If your grown child lives in an HOA community, lot of hoops to jump through to add an addition.

Will you be closer to hospitals, doctors, adult care centers, etc. if you move in with your grown children? So many retirees forget how important it is to have an urgent care close by. If eventually you stop driving, does the community offer alternatives or would your grown child and spouse need to do the driving? Does your grown child and spouse have careers? What about children still at home going to school?
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How does Eric feel about this? What does his wife think about this? How is your relationship with his wife? I assume his name is Eric from your title EricsMimi.

Why not just sell your house and move into an assisted or independent living place?
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Eric, sounds like a good idea, but my concern would be if something medically should happen to you within the next 5 years and there isn't enough funds to carry you though assisted listing and/or nursing home.

Then you would need to apply for Medicaid to pay for your housing and care [which is different from Medicare]. Medicaid would do a financial look-back and notice you paid for an addition onto your children's home.... to Medicaid that would be considered a "gift" and that would throw a wrench into what Medicaid would pay.

As for a loan, if you already own a house, you could look into some type of "line of credit".
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There won't be a simple single answer.

My 1st ?'s to even start trying to figure this out are....
the son/daughter of the property where MIL suite would be built, do they own house outright? No mortgage? Release of Deed of Trust recorded at courthouse? No HELOC or other encumbrances on property? Existing HOAs? Allowable by code?

I'd determine those answers before even looking at building costs.
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Er. If you need a loan for this work, how are you planning to repay it? Do you have a home of your own which you plan to sell once the new suite is ready?
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