If you made your initial deposit and your monthly payments with a check, you'll be able to show the lender that you pay on time. If all of your payments were to reduce the price, the owner should give you a 6% seller assist which will help you with your closing costs.

If you are saying that ALL of the monthly payments go toward the purchase price, I will assume that there is no interest involved. So, assuming that this is so and assuming you have 24 payments into the home, this would give you $12,000 equity into the home.

I do not know what arrangements were made, but if you are not paying any interest, I would stick to paying your parents instead of getting a loan from a lender. Lenders charge interest.

If you are to pay your parents a balloon payment at some point in time and you will need to get a loan, then all the payments should go right into the equity of the home as you have stated. Your parents would need to write up a document reflecting this and you should have little problem obtaining the loan as long as the $12K is at least 20% of the homes value. Also, the payment history, as long as it was consistent, should also show a good payment history.

Hope that helps,

Terrence Charest, e-Pro