Posted on: 25th Nov, 2010 05:04 pm
I have been approved for a mortgage of $124,000. My mother offered me her house for $80,000. I would like to get a mortgage for $100,000 to cover closing costs and updates. The appraisal should come in at $130,000.00. Is that possible and how are the funds distributed at closing?
Hi sjflint,
If your mother's property is free and clear, then you will be able to get a mortgage on it. You will have to contact the lender and he will help you know how the funds will be distributed at the time of closing.
Thanks
If your mother's property is free and clear, then you will be able to get a mortgage on it. You will have to contact the lender and he will help you know how the funds will be distributed at the time of closing.
Thanks
Make the purchase price $125,000
with a gift of equity of 20% of that = $25,000
That leaves a mortgage amount of $100,000
As part of the contract include a seller sales concession of 3% of the mortgage amount to be paid towards closing costs. That is $3,750.
I have no idea what closing costs are by you. Make it smaller or larger to cover your closing costs.
Your mother receives $86,250 after closing costs at closing.
After she deposits that check she gives you $16,250 as a gift and you use that for repairs.
with a gift of equity of 20% of that = $25,000
That leaves a mortgage amount of $100,000
As part of the contract include a seller sales concession of 3% of the mortgage amount to be paid towards closing costs. That is $3,750.
I have no idea what closing costs are by you. Make it smaller or larger to cover your closing costs.
Your mother receives $86,250 after closing costs at closing.
After she deposits that check she gives you $16,250 as a gift and you use that for repairs.
Thanks Guys, that explains it.