Using Equity In Home As Downpayment
My father is agreeing to take out a home equity loan on his primary residence to pay off a morgage of 40K on my primary residence that currently belongs to him. He then plans to deed the property to me outright. The property has been appraised at 80K. I then plan to borrow against the equity in the home at least 65K to pay off some debt and to gift he and mom 10K apiece from both my wife and I to pay off his loan.
My wife and I are currently looking for a new home. Should we go ahead and use all of the money that we borrow as a downpayment on a new home and then borrow on the new home to come up with the 40K ? Or should we pay the 40k with the home equity loan and then use the rest of the money on a down payment?
Ideally, we would just sell the property; however, while it has been our primary residence for two years, we have not owned it for that period of time and we would like to avoid the Capitol Gains. 
dude...way too complicated!
have dad sell the home!
gift you the down for your home....
dad can drop money in tax deferred ira or apply it to his primary residence.