USA Best way to finance loan to buy out sisters half of parents home

[john908]

My mother passed 2 months ago and we finally got the will straightened out with the county.My sister and I are co executors. Zillow shows the value of the home at 400k but being run down and in need of repairs,300k would be closer.I plan on getting a appraisal.
So I want to give my sister 150k but need need help on how to chose the best way to do that.
I have a HELC for 100k i could use and maybe pull 50k from 401k?
I dont think 150k out of 401 is a good idea either.I will be 65 in July and could use the SS income to repay the HELC. Would the interest deduction from HELC offset tax on 50K coming out of 401? I only have 110K in savings for emergency and monthly bills. My home is paid off. I would want to sell my bi-level and move into moms ranch but it would be 3-4 months of repair work for my son and I. I need to remove kitchen cabinets to replace water damaged floor from sink leak,living room and hallway floors from animal damage.All new windows before I would move in. Then new shingles,furnace,water heater and so on.Value may be below 300k is why I need a appraisal. Sorry about the long post. Our combined income is 61000k,monthly is 2250 from my 401, 986 from pension and wife has pension and ss thats about 1700.
So we are both retired,hope someone can make sense of my mess.

 

[vpryce]

Hi John,
Thank you for your question, please note the information provided here is for general information purposes only. Any reliance you place on such information is strictly at your own risk. It is not intended to constitute legal or financial advice and does not take your individual circumstances and financial situation into account.

At your correct age I would not suggest taking out additional debt financing to buy your sister, especially if you both have children and also have your own home. What I would suggest, however, is for you and your family to have a sit down and work up and action plan to repair the house and get it rented. The income from the said rental flows to both and your sister of the remainder of your life. Upon death of any party, all subsequent income follows to their surviving heirs equally.

It is important to have this in writing, also it should be made clear that all parties that received income from the said property bears all current and future repairs cost, property taxes and insurance charge equally. Hopefully I was unable to allow your mother house to stay in the family as a means to create intergenerational wealth.

 

[john908]

Thank You for your response.My sister is 71 and wants to retire but needs her half to do so. My son is 38 so he can help me with repairs..I hate to do the HELC and put my paid off house at risk but I will get taxed hard and pushed into a higher tax bracket.