Posted on: 05th Feb, 2007 04:17 pm
ever since i graduated from college, i've been staying with my dad rent-free and he has just retired and wants to sell me the house. the house should appraise for 150-155k and i was planning to get 80% of that as the mortgage and give him 95k and use the rest for improvements. of couse, i cannot "officially" buy the house for this because it's not for fair-market value. what is the easiest way for me to buy the house from him without any money out-of-pocket? should i have my dad add me onto the deed, refinance, and then drop him from the deed? is there another way to achieve fair-market value (gifting, etc.)? i\'m so confused with all of these rules and just want to buy the house. any ideas? thanks.
aaron
aaron
aaron, your father can make a quit claim deed to transfer title ownership of the house to you. it will be considered as a gift to you. after you get the ownership, contact lenders, get a suitable mortgage and pay your father the amount you have said.
i think this would be the easiest way to go about it.
i think this would be the easiest way to go about it.
Hi Aaron,
I agree with Russell, since you want to get ownership from your father and it being inter family transfer; use of quit claim deed will be more suitable. Your father will make the deed as the grantor and you being named the grantee. Get a quit claim deed form (you can use this one - 'http://www.wsba.org/info/x-12c.pdf'). Have the deed notarized and recorded with the local recorder's office in your county to get legal title of the house. You should take help of a real estate attorney in drafting the deed.
Lenders require a person to have title ownership of the house before considering a loan request. After you get the house in your name, you can search lenders for the mortgage. The approval of the loan will depend on your credit score, income level and other qualifying factors.
David
I agree with Russell, since you want to get ownership from your father and it being inter family transfer; use of quit claim deed will be more suitable. Your father will make the deed as the grantor and you being named the grantee. Get a quit claim deed form (you can use this one - 'http://www.wsba.org/info/x-12c.pdf'). Have the deed notarized and recorded with the local recorder's office in your county to get legal title of the house. You should take help of a real estate attorney in drafting the deed.
Lenders require a person to have title ownership of the house before considering a loan request. After you get the house in your name, you can search lenders for the mortgage. The approval of the loan will depend on your credit score, income level and other qualifying factors.
David
Thanks for the help. What kind of tax ramifications, if any, are there for either of us with regard to him gifting me the house via a quit claim deed?
Hi Aaron,
Welcome to the forum.
The easiest way to get the house without money out of pocket will be to ask your dad to sign a quit claim deed and convey his property to you. Your father will have to pay gift tax on the property value exceeding $12000. The $12000 is the exemption limit on gift tax . In addition, you may have to pay transfer tax for the change in title of ownership.
However, if your your dad insists on selling, then you may buy the property with a home loan.
You may consider a loan that will help you in the purchase as well as home improvement. There are such loans available in the market. Fannie Mae approved lenders provide one such loan program – the HomeStyle mortgage.
For more details on this loan program, you may refer to previous community discussions on Home Purchase and improvement loan and HomeStyle mortgage.
Hope I could help you to some extent.
God bless you.
Samantha
Welcome to the forum.
The easiest way to get the house without money out of pocket will be to ask your dad to sign a quit claim deed and convey his property to you. Your father will have to pay gift tax on the property value exceeding $12000. The $12000 is the exemption limit on gift tax . In addition, you may have to pay transfer tax for the change in title of ownership.
However, if your your dad insists on selling, then you may buy the property with a home loan.
You may consider a loan that will help you in the purchase as well as home improvement. There are such loans available in the market. Fannie Mae approved lenders provide one such loan program – the HomeStyle mortgage.
For more details on this loan program, you may refer to previous community discussions on Home Purchase and improvement loan and HomeStyle mortgage.
Hope I could help you to some extent.
God bless you.
Samantha
