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.
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.
P.S. Go to my Best Mortgage Rate Blog
, an entertaining source of mortgage information.
Learn More About Your Dream Team
How to Buy a House Part 1 Meet your real estate agent and save yourself heartache and headache.
How to Buy a House Part 2 Meet your mortgage lender - Expect more than quoting the lowest rate or taking an application.
Check out List of Mortgage Companies, a local lender directory.
How to Get a Mortgage Part 3 Meet your home inspector and avoid buying a money pit.
How to Get a Mortgage Part 4 Meet your real estate appraiser - Does an appraisal assures you of a good deal?
How to Get a Mortgage Part 5 Meet your title insurance companies for coverage resulting in peace of mind.
How to Get a Mortgage Part 6 Meet your homeowners insurance agent because there is more to it than the cheapest quote.
How to Get a Mortgage Part 7 Meet your escrow and closing disclosure form, the guardian of your real estate transactions.
Title, Abstract Services and Escrow Agents, a mortgage service provider directory.
How to Buy a House Questions and Answers II.
How to Buy a House Questions and Answers I.