Posted on: 12th Sep, 2011 10:29 am
Hi,
My mom purchased her house for around 180,000.00 and I am planning buying the house from her (I am a first time home buyer). I believe she paid approximately $30,000.00 on the house thus far so does that mean there is $30,000.00 in equity on the house (I believe yes)? If she was going to give the gift of equity would I need to get a mortgage/purchase the house for $150,000 or can I purchase the house at even a lower price if she is willing to sell it for less? I have some savings but am concerned with the monthly mortgage payment - i want to keep the monthly payment as LOW as possible. Can someone please help explain to me how much I can/should purchase the house for and where my mom and I should start with this process? Who do we talk to first?
Thanks SO much (in advance) for your guidance!
My mom purchased her house for around 180,000.00 and I am planning buying the house from her (I am a first time home buyer). I believe she paid approximately $30,000.00 on the house thus far so does that mean there is $30,000.00 in equity on the house (I believe yes)? If she was going to give the gift of equity would I need to get a mortgage/purchase the house for $150,000 or can I purchase the house at even a lower price if she is willing to sell it for less? I have some savings but am concerned with the monthly mortgage payment - i want to keep the monthly payment as LOW as possible. Can someone please help explain to me how much I can/should purchase the house for and where my mom and I should start with this process? Who do we talk to first?
Thanks SO much (in advance) for your guidance!
the equity in the home depends on the "market value", so if you paid down x amount of the mortgage, your value would have to be the same or higher than the last loan taken out. homes generally appreciate yearly, but we are in a tough time now with housing...to do the gift, your mother would be selling the home to you at a discount. so if the purchase price is 150k but the value is 200k, she can gift you the equity in the property and some lenders may allow you to use that as down payment. you can also do fha mortgages with only 3.5% down. your other option would be to allow your mother to add you on title, start to make some payments on the property with cancelled checks, then your mom would be able to add you to the loan via a refinance. then later, you can refinance her off the loan. good luck!
Thank you - this was helpful!