Home Buying in 80001>Question Details

lummack14, Home Buyer in 94513

Mom wasnts to sell us the house she bought 4 years ago in California for the balance of the loan.

Asked by lummack14, 94513 Mon Nov 4, 2013

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Actually the advise given to you by Chae Bae is correct. Best thing to do is go online and get a California real estate contract and document the transaction you can do this on your own or with the help of a mortgage broker. If the equity is not enough to cover the 25% then you could also consider an LPMI loan.
1 vote Thank Flag Link Mon Nov 4, 2013
There doesn't appear to be a question in your statement. If you are trying to ascertain if the loan balance is market value, then your best bet is to contact a couple of real estate agents and ask them to provide you with a comparative market analysis to determine if that is a reason a price to put on the home.
0 votes Thank Flag Link Mon Nov 24, 2014
It is not clear what the question is.
She will need to pay off the loan, closing costs and real estate commissions. Do you know if the market value will cover all that?
0 votes Thank Flag Link Sun Nov 23, 2014
H Lummack,

The first thing to do is to get a local Realtor to look at the home and do a market analysis to determine the true market value. In many cases these days, homes are worth considerably more that the sellers think. Then that listing broker can go over the options available. Many of which will be among the suggestions and advice listed below. All the best.

Robert McGuire ASR
Broker/Consultant
Your Castle Real Estate
Direct - 303-669-1246
http://about.me/robertmcguire33
0 votes Thank Flag Link Sat Nov 9, 2013
Actually I was assuming that your mom has a conventional mortgage which is not assumable. If she has an FHA or VA loan you may have an assumable loan. Also, if there is equity in the home having your mom provide it to you at closing is doable. I would check with a CPA as to how it would be looked upon tax wise. I have done 2 of these loans this year one from a woman to her ex and another from a sister to her brother without any tax consequences. Putting you on deed is not really a solution as the lenders generally require 12 months for s seasoned title. If you could wait 12 months than adding you to the deed maybe an option. If I knew your specific situation I could better help you. All of the advise is possible depending on your specific situation
0 votes Thank Flag Link Mon Nov 4, 2013
NO, I disagree with the answers about pumping up the sale price without knowing any details. A gift that is too large could trigger a gift tax. The type of loan you use to finance the property must document the real world, ESPECIALLY when it is a non-arms length transaction. Not knowing the value of the property, the loan amount, the type of loan, color of your eyes, okay, just kidding on that last one, makes any answer less than accurate.

First move I would make is to find out if mom’s loan is assumable. If it is, then apply to assume it. DO NOT have mom quit claim deed to you without prior lender approval. That will trigger the due on sale clause in her loan if there is one. Good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
I answer questions about financing real estate based on my decades of experience dealing with mortgage underwriters. This answer is my personal opinion, has not been reviewed or approved by the company I work for. I do not offer legal or tax advice, if you need answers from an attorney or CPA find one knowledgeable in your local market.
Web Reference: http://jamessimms.com/
0 votes Thank Flag Link Mon Nov 4, 2013
It is not clear what the question is, but here is some general info.... Check with a local attorney as I'm not familiar with California law but here is something you might try. I assume this is a friendly transaction. Have your Mom quit claim you on to title and record it, establish a record of making payments to your Mom and then refinance. In Colorado this is called a Land Contract. I advise you to use an attorney because there are technicalities that need to be understood and possibly addressed through a written agreement but this will save you the down-payment requirement. You should have a resale appraisal done on the home prior to doing anything so you know how much equity there is in the home. If there is no equity then you need to ask yourself... why am I doing this? Note also, that loan to value ratios will need to meet lender requirements before you can refinance. Ideally you are looking for at least 20% equity at the time of purchase. Less than that and again you need to ask yourself... why am I doing this? In any case you do not want to pay more than the home is worth. If your Mom does not want to do a land contract, your next best avenue is NACA (Neighborhood Assistance Corporation of America). Google them. 100% financing, no closing costs, no down payment, a great loan, but it takes at least 6 months to get if not a year. This loan is given based on your payment history and debt to income, not FICO scores. NACA will loan to anyone, but the loan process is long and often frustrating. However, the frustration is definitely worth the final loan product.
0 votes Thank Flag Link Mon Nov 4, 2013
first question is whether or not her loan is assumable. You have gotten some good suggestions and advise
0 votes Thank Flag Link Mon Nov 4, 2013
Sounds like a good deal. But you may want to talk to your mom's lender, because for many years now lenders issue loans that are not assumable. You could certainly take out a new loan and just have your mom pay off her loan. Don't forget that there are closing costs on both sides of the transaction. You might also want to check with a local Realtor to see what has been happening in your mom's market. If the market has improved since the recession of several years ago, then it would favor your moving forward. If the market has declined, then it might not be a wise decision.
0 votes Thank Flag Link Mon Nov 4, 2013
You should find out what the house is worth and if there is enough equity, then have her sell it to you for 25% over the mortgage balance. The reason being is that she can do a gift of equity and you won't have to come up with any money to buy the house. You are essentially do a zero down loan at today's rates. I can advise you about the loan as I'm also a licensed loan officer in California.
0 votes Thank Flag Link Mon Nov 4, 2013
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