Buying A House From Family

by Torrey from Pennsylvania

Regarding Buying A House From Family: Hi Kate, Will it be difficult for my niece to get a mortgage if I sell her the family homestead for a price significantly below market value?

Kate Answers: Buying A House From Family

Hi Torrey, Non arm's length transaction, isn't that's the odd term used to describe a real estate transaction that consists of one family member selling a house to another! Like yours, a lower than market sales price is often involved.

I assume you want to use the difference between the appraised value (the higher amount) and the sales price (the lower amount) as a down payment and/or equity.

Some mortgage programs allow for this and others don't. So be certain to explain your purpose upfront for a reliable response from a lender.

If the answer is a "no" at first, try another lender. I see a lot of variance among mortgage institutions when it comes to buying a house by means of a non arm's length transaction.

I'd also recommend consulting an accountant to see if you should be looking out for tax consequences.

Good luck helping your niece. I hope you'll come back to my website again in the future. Of course, all of my information is free.

So remember to bookmark Get-Your-Best-Mortgage-Rate.com to your favorites and visit often for up to date tips for buying a house, mortgage news and refinancing advice. You can also invite friends to comment on this page or create a page of their own like you did.

Best Wishes,




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Learn MORE About Your Dream Team

How To Buy A House Part 1 Meet your real estate agent and save yourself heartache and headache.

Discover local real estate agents by visiting Real Estate Directory USA at my website Prime Real Estate Articles. Appraisers, inspectors, home stagers too!

How To Buy A House Part 2 Meet your mortgage lender - Discover why closing loans requires more than quoting the lowest rate or taking an application.

Looking for a lender near your home? Check out List Of Mortgage Companies, my lender directory right here on Get Your Best Mortgage Rate.

How To Get A Mortgage Part 3 Meet your home inspector and avoid buying a money pit. It's THAT simple!

How To Get A Mortgage Part 4 Meet your real estate appraiser - Don't fall into the trap of thinking the appraisal assures you of a good deal.

How To Get A Mortgage Part 5 Meet your title insurance companies for little known coverage resulting in peace of mind.

How To Get A Mortgage Part 6 Meet your homeowners insurance agent because there is more to getting insurance than the cheapest quote.

How To Get A Mortgage Part 7 Meet your escrow and HUD 1 statement - Find out why escrow is the guardian of your real estate transactions.

The service provider directory is found at Title, Abstract Services and Escrow Agents - Please visit!

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Ask Kate About Home Buying - Ask a question to get an answer from Kate.

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