In looking to purchase a home, I am strongly considering a personal loan from a family member in exchange for providing their money a better growth alternative than traditional means in the form of my interest payments on the loan. Which in turn would result in a lower overall payment for me than with traditional lending. They make more, I pay less. Win/win, right?
My question is, how does that money I receive up front get looked at by A) the lender and B) the IRS? Does it get reported as income? Does the lender (or seller) wonder where I came across all of this money? I want to make sure I am not going to create a problem for myself or my relative.
Any help and insight would be appreciated.
Read more: Help understanding personal loans applying to mortgage?
