Posted on: 22nd Dec, 2009 11:07 am
I'm currently applying for a loan on the equity of a house me and my brother own. The mortgage co. said that the only way they could give me the money as a gift of equity. They said my brother will gift his part to me but I would first have to come off the title and then be added back during escrow. There is no money owed on the property. Can anyone please explain on how
gift of equity would work in this scenario?
gift of equity would work in this scenario?
The fact that your brother will gift his part to you does not require you to remove your name from the property deed. When a seller sells off the property at a price below the current market value, to a family member or someone with whom he/she has relationship, it is known as gift of equity. It requires a gift of equity letter that is signed by both the seller and the buyer. To know how the gift of equity works, check out the given page:
http://www.mortgagefit.com/inprocess/about6546.html#23462
http://www.mortgagefit.com/inprocess/about6546.html#23462
is your brother planning to become a non-owner of the home? if that's the case, then it's a simple matter of him relinquishing his ownership interest to you; there'd be no need for a gift of equity in that instance. usually there'd be a buyout of his portion of equity going back to him.
i'm confused, though, by your description of what's taking place. i don't think the bank has a clue, either.
i'm confused, though, by your description of what's taking place. i don't think the bank has a clue, either.
