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As of June 25, 2018, we’ve made some changes to the way our mortgage approvals work. You can read more about our Power Buyer ProcessTM.

Buying a home can be a tricky, expensive and stressful process. In some situations, you may consider buying a home from a family member or friend. After all, you’d likely get a lower price, go through a quicker process and potentially even have access to owner financing, and wouldn’t it be much easier to deal with someone you already have a great relationship with? You wouldn’t even need a real estate agent!

Whoa. Slow down there.

Buying a home from someone you know might be a great idea, but there are a number of things you need to know before you can sign on the dotted line. Before you’re ready to move into your new home, let’s go through the basics to help you prepare.

What Is an Arm’s Length Transaction?

Real estate transactions can be broken down into two broad categories: arm’s length transactions and non-arm’s-length transactions. An arm’s length transaction is a transaction between two parties who don’t have a relationship with one another – whether that’s a family tie, a business connection, etc. Each party is confidently able to act in their own self-interest. For example, when you buy a house from a stranger, it’s considered an arm’s length transaction.

What Is a Non-Arm’s-Length Transaction?

A non-arm’s-length transaction is a deal with someone you have a relationship with, whether that’s professional or personal. This can include family members, friends, business partners, etc. This type of relationship between buyers and sellers is known as an identity of interest.

When a relationship like this exists, there is a greater chance that one party could manipulate the other party in some way, or both parties could work together to try to cheat the fair market price of the home. This is an example of mortgage fraud.

Example of a Shady Non-Arm’s-Length Transaction

Let’s say that Mary wants to buy a house, and her uncle Sam says he’ll sell his house to her for $200,000. In reality, though, the house is only worth $150,000. Sam – who knows that Mary trusts him – is trying to use his relationship with his niece to inflate the price of the house and get more money. This behavior can be considered mortgage fraud.

Luckily for Mary, there are entire teams within mortgage companies and governmental organizations whose job it is to sift through these types of transactions looking for shady situations. One way they do this is by requiring an arm’s-length principle of transfer pricing. What is that? We’re glad you asked.

What Is an Arm’s-Length Principle of Transfer Pricing?

The arm’s-length principle of transfer pricing requires that the amount charged for a house is the same for transactions between strangers as it is for transactions between those with personal ties. This protects one or more parties from being manipulated by an inflated market value.

Are Non-Arm’s-Length Transactions Illegal?

Non-arm’s-length transactions are legal, but because of their potential for fraudulent situations, they are treated with a higher scrutiny than an arm’s-length transaction. There are more government and individual lender guidelines to follow when trying to get a mortgage for a home. There are a few things lenders want to guard against in family deals, and some of them are for your own benefit.

Because the water can be so easily muddied with family or friend transactions, lenders want to ensure both the buyer and seller are acting in their own self-interest (not under any duress), are agreeing on a price that is close to the market value and aren’t engaging in mortgage fraud, including misrepresentation, straw buyers, inflated prices, etc.

In a short sale, for example, an arm’s length affidavit must be signed to protect against a family member buying the home but allowing the original owner to stay in the home for a greatly reduced mortgage cost.

Should You Buy a House from Family or Friends?

There are a lot of potential benefits to buying a home from a friend or relative, but mixing home sales and family can be a sticky business. Here are a few other things to consider before purchasing a house from family or friends.

Added Restrictions

With a non-arm’s-length transaction, you’re going to risk running into more obstacles with getting a loan because of all the added restrictions, and you may be subject to extra taxes because the IRS will be watching closely to make sure a fair market value – and interest amount – is paid for the home. If you buy the home at a cheaper price and then sell it within a few years, you may be subject to capital gains taxes as well.

Jealousy

In some situations, other family members or friends who aren’t directly involved with the transaction can become jealous of the situation (for example, if you buy a house that’s been in the family for generations). While this doesn’t have a direct impact on the transaction, it can cause some kinks in your relationships. So be prepared and aware of the overall perception when purchasing a home from a family member or friend.

Shift in Financial Situation

The next potential pitfall is a sudden shift in the seller’s financial situation, which could move them to ask you for more money on the purchase, especially if they provided the loan for you instead of a mortgage lender. While you likely have a group of well-meaning people in your life, money is something that can make many people turn mean fast.

Pro Tips

These can be some touchy subjects, but if you’re buying a home, you have to know everything about it, whether you know and trust the seller or not. Use this checklist before moving forward with the purchase:

  • Make sure the family member is current with their mortgage payments, because it could impact your mortgage approval if they’re not.
  • Work with a title company to protect yourself from any other liens that might be on the property. Many title companies have for sale by owner (FSBO) teams that can help you a lot when you’re not using a real estate agent.
  • Get legal advice. This isn’t because you don’t trust your friend or relative, but because you aren’t well-versed in the legal aspects of purchasing a home. An attorney can help you with all the paperwork and make sure you don’t inadvertently commit mortgage fraud.

Buying a home from a friend or relative can seem like a great way to simplify moving into a new home – and it can be. But it’s important to understand how the process works and the potential risks involved. Our Home Loan Experts are ready to help you through the home buying process. If you have questions or comments about any of this, let us know in the comments!

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This Post Has 341 Comments

  1. My son-in-law has declared bankruptcy. He is living in a house that I hold a registered second mortgage on. Previous homes have been purchased in the past. They were financed via a loan agreement between only my daughter and myself that continues and now includes the existing home (the loan was converted to the mortgage). Since I am a debtor I am filling out the Proof of Claim form 31 for the claim on the mortgage. Can the mortgage that I hold be considered an “at arms length” loan since the original loan agreement process to my daughter was prior to her getting married?

  2. I live in a house that my mother-in-law purchased for us about 5 years ago. The mortgage/title/deed, are only in her name. She now wants us to take over everything with her coming off all of it. The loan still has 170k balance but house value based on taxes is 320k but she does not want to profit off it since we have been paying her rent since we lived here and paying for all upkeep. What would be the best way to handle that (quit claim, add us, then refi with new mortgage in our name, or sell to us through FSBO method). If we do FSBO we thought based off 320k value that a sale price of 250k might be fair for tax reasons and then use at closing funds already paid to offset the difference in 250-170 and finance the 170k in our name to pay off the existing mortgage. Thoughts?

    1. Hi Tom:

      Either of those options would work. In terms of determining the best option for you, it’s probably best to speak with one of our Home Loan Experts who can dig deep on your financial situation and determine what might be the best way to go. You can get started online or give us a call at (888) 980-6716. Have a great day!

    1. Hi Julie:

      We thank your son for his service! We can certainly help him look into his options. If you would like to get started online he can do so through Rocket Mortgage or give one of our Home Loan Experts a call at (888) 980-6716. I hope this helps!

  3. My brother and sister, together with myself, co-inherited a home when our father passed last year. The appraisal on date of death gave a FMV of $1,125,000, so our share worked out to $375,000 apiece. My sister has lived in the home as her primary residence for many years although previously it had been a rental with significant “suspended” passive losses (my share = $30,213). She decided to buy out her 2 brothers for a sale price of $750,000 ($375,000 in cash to each of us), which was smoothly accomplished with the help of an estate attorney. After depreciation recapture, the capital gain (my share = $18,958) was completely offset by the passive losses which were then “unsuspended”. The question now is whether my remaining loss (over $17,000 when other sales-related costs are included) is considered a capital loss (problematic in non-arm’s length transactions between relatives) or a passive loss that can be carried forward to offset my other rental income (or $3000 of my ordinary income)?

    1. Hi Sam:

      This is a complex tax situation beyond what we can give advice on. I would recommend speaking with a tax professional about your options. Alternatively, you can get in touch with the IRS at (800) 829-1040. Good luck!

  4. Hi if I was to purchase my mother in-laws house which I live in for around 120,000 under the home’s value And she was still to live here would that be a problem

  5. Hello, I have a difficult situation. My older brother bought a home over 10 years ago and has been renting it. He now has around $80k on the mortgage but the house is valued at $350k. He wants to sale it to my younger brother for $80k (the amount that’s left on the mortgage). Can my older brother do this without tax penalty? That’s over $250k below fair market value. Will my older brother have a tax liability or penalty if this transaction occurs?

    1. Hi Mai:

      I would recommend speaking to a tax expert to get a definitive answer about the tax issues involved in transactions between family members. However, when it comes to capital gains tax, what matters is not whether he’s selling it below market value, but whether he made any money over when he originally bought it. That would depend on the original purchase price in comparison to the $80,000 sale price. I hope this helps!

  6. I currently own the house my brother lives in. He recently passed and I’d like to sell the house to his widow. The sell would be a straight pay off of the loan from insurance policy, no loan. What is the easiest and fastest way?

    GB

    1. Hi GB:

      I’m sorry to hear about your brother. If you would like to pay off the loan during the sale and then his widow would have no loan, the best thing to do would be to get the payoff statement from the lender. Once that’s done, then you can follow the instructions on the statement and use the insurance money to pay it off. Then you can do a quitclaim deed to transfer the house to her. I hope this helps!

  7. I lost my husband recently, I’d like to buy a condo and sell my house on a land contract to my grand-daughter, would I be hit with homestead tax on my home I’m selling on a land contract?

    1. Hi Darlene:

      We recommend speaking with a tax preparer in your area or your local taxing authority because it depends on how the tax law is written. However, because the home will no longer be your primary home and you’ll still own it during the term of the contract, it’s possible your taxes may go up due to not qualifying for an exemption.

  8. I am considering buying a house that belonged to my mother and my stepfather. Both are deceased. There are 6 heirs and I am one of them.
    Hypothetically: If the house sells for $200,000; the split among 6 heirs would be $33,333 each. If I buy the house would we first deduct my share from the $200,000 – leaving $166,667 for my cost to purchase the house? Or, would I lose my heirship share, and then divide $200,000 by 5 heirs giving them $40k each, and me nothing?
    Thank you, I appreciate your clear answers.

    1. Hi Brad:

      I think the easiest way to do this is to agree upon the value of the property and then subtract what you share would be. You would have them all quitclaim their shares to you. If you were to get rid of your share, you would have to quitclaim it to them, but in that process, you give up the right to purchase the property in the future. I don’t recommend that. If you want to look at your mortgage options, you can start online with Rocket Mortgage or give one of our Home Loan Experts a call at (888) 980-6716.

  9. I would like to buy a home from a family member. I believe the appraised value to be approximately $215,000. Would like to purchase for approximately $175,000 but don’t have a super strong credit score or big down payment. Is this something I could potentially get a mortgage on even with less than perfect credit or could I do a HELOC or something similar to pay my family member? Would that equity off the top amount to anything in the eyes of a lender or am I stuck spinning my wheels?

    1. Hi Miranda. Thank you for reaching out. Everyone’s situation is different and we would need more information from you to determine whether you are able to qualify for a loan. Typically, you need to have a minimum credit score of 620 and a debt-to-income ratio of no higher than 50%. However, this also depends on the type of loan you choose to get.

      Due to all of these various factors, I recommend calling our licensed experts at 800-785-4788. They’ll be able to determine if you qualify based on your specific information. They’ll also be able to better answer your questions based on your situation.

  10. My daughter is considering buying my Mom and Dads home. They both passed away last year. The house is paid off. She talked to a loan officer yesterday that told her she would have to put 15% down on the house due to a law that has to do with a relative selling to a relative. I have researched and have not found anything specific to a down payment. Can you help me understand?

    1. Hi Marla:

      I can’t speak knowledgeably as to whether or not this is an actual law on the books. The regulation you’re referring to does match guidelines that are specific to FHA loans. FHA is a government program, so it is possible that the regulation does stem from actual legislation. However, what I can tell you is that at least in terms of FHA loans, 15% down is a common mortgage investing regulation applying to non-arm’s-length FHA transactions in certain instances. There are exceptions to this, which I will outline below.

      Essentially, if your daughter were purchasing grandma and grandpa’s primary residence that they were currently living in, she would only have to put 3.5% down. Because they’ve unfortunately passed and the inheritance is now in someone else’s name, I’m guessing they aren’t living there, so there’s an assumption on the part of the FHA that you’re just looking to unload the property which makes them take a closer look at the person who is buying from you if it’s a family member. I can tell you that conventional, USDA and VA loans don’t have increased minimum down payments in a non-arm’s-length transaction scenario. I do think it would be good for your daughter to go over your options and see if there’s a better option she might be able to get. She can speak with one of our Home Loan Experts at (888) 980-6716. I hope this helps!

  11. My Father-in-law purchased a home in 2012 for $177k. We moved in and signed an agreement as a rent-to-own. Our rent was equal to his payments on the mortgage, so we basically paid the mortgage for 7 years. The home is now valued at $320k. The amount left on the original loan is around $60k. We are now wanting to purchase the home for an agreed upon price of $120k plus add another $30k for some improvements, so a total loan of $150k. Is this doable?

    1. Hi Chad:

      We don’t currently offer renovation loans that include both the cost of buying the home and the renovation. You would have to secure separate financing for the renovation portion. One of the options for this would be a personal loan through our friends at Rocket Loans®. If you’re interested in applying, we can certainly help you look at your mortgage options with Rocket Mortgage®. You can also give one of our Home Loan Experts a call at (888) 980-6716.

  12. Hi my mom and dad want 2 buy his moms home can they still own their other home still and i live in it and pay them the 700 hundred a month house pay ment 2 them thank u for your time i look forwarded 2 your reply

    1. Hi Matthew:

      That can happen. They should notify their mortgage lender though because at the point that they no longer occupy it, it becomes an investment property. The good news is that as long as they have lived in the home longer than a specified period in their mortgage contract, they should be able to make the conversion without the property being subject to a higher interest rate. Hope this helps!

  13. My son is renting our house. As I am not the primary residence of the home any longer I lost my homestead tax exemption and the property tax went fr $1900 up to $3600. If I were to put my son on the deed would the homestead exemption be reinstated since he is now the primary residence of the home???
    He wants to buy the home but w/student loans he doesn’t qualify. The home is in FL Anand I live in AZ.

    1. Hi Jackie:

      If you put him on the title, it would be his primary residence, but not yours, so it wouldn’t affect your tax bill. However, I’m not sure how the exemption works if you’re both on the title. I recommend speaking with a tax advisor as they would know how the statutes are worded in your locality. Thanks!

  14. Hi I inherited my childhood home along with my sisters when my father passed and now I’m trying to buy out their part to own the home. I House Is paid off. They offered to sell it to me for $190 which would be very affordable for me but I really don’t want to do the cash out refi because the rates are much higher. I also cannot wait 12 months per Fannie Mae to purchase nor do my sisters want to wait for their share that long. Is there any other option I can do to get off the title and buy the house out right with a 30 year conventional loan?. I just can’t believe they make it so hard for you to keep a family house in the family if all parties are in agreement. I’m afraid we’re going to lose it to some stranger. Please Help.

    1. Hi Ren:

      I’m sorry for your loss. I know this is a very confusing and stressful time, so my first advice is to take a deep breath. I’m going to try to break this down for you.

      First, because the house is completely paid off, any mortgage you take out will be a cash-out transaction. Although there is a small pricing adjustment for cash-out vs. rate/term transactions, it’s not like the difference is full percentage points. You would be taking out just enough in this situation to pay off your sisters’ shares, and this isn’t an unusual scenario at all. Also, the waiting period for a cash-out refinance doesn’t apply when you’ve inherited the property from someone else.

      Hopefully this has helped put your mind somewhere at ease. I do recommend speaking with one of our Home Loan Experts at (888) 980-6716. They would be able to give you further details on the process and you would have the opportunity to move forward if you wanted to. Good luck!

  15. My Husbands mother is wanting to move and is offering to let us rent to own or just buy the house for $210k. She has paid off the mortgage already, so we were thinking of offering to pay her a monthly amount instead of taking out a mortgage. Is that legal? Would it just be as if she is giving us a loan? Thanks!

    1. Hi Corrie:

      As long as you and your mother-in-law agreed to it, you can pay her however you want. You could be added to the title and she could take her name off when it was paid off if you wanted. I hope this helps!

  16. My wife relatives(Aunt 66yrs old and Uncle 65 yrs old/retired) wanted to sell their home to us in lower price but as part of the deal they will still stay on us bcoz my wife uncle is already sick and undergoing dialysis(which I don’t have problem). My plan is to convert the garage into a studio type room them the rent that they will pay will become part of the payment that we owe from them. What is the best option for us to do this? Can we pay them directly and put our name on a title or just ask them to put the house in a trust under our name while we continue paying the mortage since we don’t have any plan to sell it? I hope you can advise us bcoz we dont know where to start but we wanted to move on.

    Thanks,

    JZ

    1. Hi Jason:

      It’s possible with most loan options for both the buyer and seller to remain in the home after closing. The state of Texas has a regulation that says you can’t and you’ll also run into trouble if your financing through a USDA loan. In all other scenarios, buying the house directly would be an option. Other lenders may also have different policies regarding occupancy.

      You also have the option of working something out with them and paying them to add you to the title or in a trust in your name. If you go the trust route, I would look at their mortgage documentation and determine exactly what you can and can’t do. If you put the mortgage in certain kinds of trust, there’s the chance it may be called due immediately. If you have any questions, I would contact the lender or servicer (the entity you pay the bill to) so you can get clarity.

      If you want to go over the mortgage option, I advised speaking with one of our Home Loan Experts at (888) 980-6716, and we would be happy to talk you through it. Hope this helps!

  17. I am currently renting from my father. We had a market appraisal done last year, which came to $160K as-is. I have since, with my father’s approval, have spent $50K in repairs and upgrades. My rental agreement states I can purchase the house from my father for $160K at any time. Since this is not an arms-length transaction, will I need to come up with $32K cash for the downpayment? Or will the difference between the purchase price and the current value of the house count as part of the down payment?

    1. Hi Sharon:

      In a non-arm’s length transaction with a family member, the difference between the fair market value and the agreed-upon discounted purchase price can be used as part of the down payment. Hope this helps!

  18. Our cousin wants to buy my mother’s share out my grandmothers home by putting down 20% and making $3,000 per month payments to our father. We are very nervous about the cousin doing this in case she defaults on the loan. Plus, my father won’t be making any interest on this loan. Could be very risky for my sister and I. Half of this home is our inheritance and the other is our cousins.
    Getting a fair market value for the home is going to be challenging as well.
    We would prefer that the cousin get a bank loan and make the monthly payments this way, but for some reason the cousin isn’t wanting to do this, or my father has just decided to let the cousin make the payments without interest. We don’t think this is right considering the situation. This is very complicated. Just trying to simply things for my parents having to deal with this. My father will be keeping the title of the home but if he or my mother pass, then the children will have to deal with any problem the cousin has with paying the monthly payments. This is our concern.

    1. Hi Ann:

      If I’m understanding this correctly, the down payment and payments will all be made to your father. Therefore, even if she “defaults” on this family loan, you would still keep your interest in the property because you’re still on the title assuming you inherited an equal share of the property with your sister. You would be in a position to give her possession only when she paid it off. You would have to deal with her ability to make payments, but you wouldn’t be in any danger of losing your share of the title.

      If she were to get a traditional mortgage, no one would ever have to be the bad guy and upset the relationship, but that’s a decision for you and your family. Hope this helps!

  19. Hello,

    My husbands brother just offered to sell us his house that we are currently renting in. Online records state the house was sold in December 2006 for $170,000. The house is estimated at $118,000 now. He told us that the mortgage isn’t paid off and that he gives an approx. Mortgage payment of $950.00. He told us that he would sell us the house if we gave him $60,000 for it. With all of that being said are we being cheated or is he actually trying to save us money if we buy his home. Are there contracts, specific paperwork to keep in mind if we do go ahead and buy the house from him. Please help.

    1. Hi Brenda:

      Online estimates obviously aren’t official, but if it’s worth anywhere near $118,000 and he’s offering to sell it to you for $60,000, it sounds like he might just be trying to get the mortgage balance back and pay it off. If the house is in good condition and you’re interested, why not? It sounds like a deal. Moreover, because he’s family, when you go to get a mortgage, any discount given on the sale price vs. what he could actually get on the market for the home can be considered a gift of equity and be used toward your down payment and closing costs. We would just need to see a letter that says, among other things, that he doesn’t expect to be paid back at any point. If you want to get started online, you can go over your options with Rocket Mortgage or give us a call at (888) 980-6716 to have one of our Home Loan Experts go over your situation. Hope this helps!

  20. My mother has her house which is paid up. She now is moving to a retirement community and wants to sell the house and slit the profit between my sister and I. I am interested in buying out my sisters half and keep the house as an investment and rent it. Pros and cons?

    1. Hi Kevin:

      Assuming the house is completely paid off, we can help you with this. Seeing as it’s an investment property, that would be a conventional loan and there really isn’t anything special about the financing of a non-arm’s-length transaction. I can tell you that the minimum down payment for any investment property would be 15% or 20% depending on your median FICO® score. I’m going to recommend you speak with one of our Home Loan Experts at (888) 980-6716 when you’re ready to get started. Have a good day!

  21. I am currently living in mom’s house, which has a defaulted mortgage; however, the home is NOT foreclosed upon. We are working through a lawyer to come up with a solution to satisfy the loan and keep the house before it goes into foreclosure. The payoff amount for the default is approximately $15,000 less the appraised value. I would like to purchase the home from my mom, which in essence could satisfy the payoff amount. What is the likelihood a lender would loan me the money to buy the home?

    1. Hi Rashad:

      If you buy the house, your mom can’t continue to live there. That would be the restriction that the major mortgage investors (Fannie Mae, Freddie Mac, FHA, etc.) have. If she won’t be living there, I suggest you give us a call at (888) 980-6716 and we can go over your options. If that doesn’t work, I don’t know if she’s past the point where you can do a modification to avoid foreclosure. I would talk to the servicer who you make the payments to. Good luck!

  22. In January we moved into a house as a rent to own. The past 3 month have been horrible. Constantly calling 2 weeks before rent is due. Many times a day til one of us answer. We pay the money to her mom since they moved out of state and don’t trust anyone with their new address. As of today we told her we are going to move. She said she was going to send out a certified eviction letter. Because we didn’t answer the phone. So we told her to do what she wants. Then goes back on saying it. Well we told her we are going to move anyways we are done with her….long story short. She never sent us a contract. Only via facebook messenger do we have it in writing that we were doing rent to own. But she said she is giving us 24 hour notice that her mom will be here to check on the house in place of her and her husband. And that the next few weeks buyers will be coming with her mom to see the house and we need to let them in. Can she send her mom in place of her? Do I have to let them in? I stay home with 2 year old all day. Shouldnt whoever owns the house be the ones who show buyers? Dosent she have to cone back here to evict us? Also she lied to her bank about renting out the house. Told them I was her cousin living here for free. Both are lies. Said I was watching the house while she was away.

    1. I think the best thing to do would be to talk to a lawyer, but things that were said on Facebook may or may not have the force of an actual contract. I think you need to get a lawyer involved to spin you up on eviction laws in the area.

  23. Hi! My fiance and I live in his mom’s house and we have been paying the mortgage and all of the associated bills for 5 years. We want to purchase the house from her and she said that with the difference of what she owes and what she’s selling it to us for, she will cover our down payment, a new roof and new siding since the house needs it. Is that possible? Just want to make sure we know if it’s legal to do that.

    1. Hi Lydia:

      As long as you aren’t considering getting an FHA loan, your mother-in-law can use the money from the sale to finance your down payment. However, having a family member gift you a large amount of money for a down payment could raise a red flag in the home buying process, so you’ll need to provide a gift letter and evidence of the transfer of funds to be able to use the money for your down payment. You can read more about down payment gifts here. Covering a new roof and siding would be a separate transaction and wouldn’t need any documentation or letter. One thing to note is that if you want to refinance and get rid of your mortgage insurance, you’ll have to get an appraisal with the new roof, since the new roof can increase the value of your home and change the amount of equity needed to remove the mortgage insurance. I hope this helps!

      1. Sounds like you’re referring to a gift of equity transaction, if that is the case then yes, most of what you said is true.
        A gift of Equity, for example, is when a 400k house is sold for 300k, basically gifting you 100k of equity. In most cases your mortgage company will apply that 100k of equity as a down payment, allowing you to finance the entire 300k without private mortgage insurance. Indirectly…she is paying your down payment.
        As for the roof and siding, my only guess is that she might think that by paying your down payment indirectly, you can use the money you were going to use as a down payment to pay for the siding and roof.

        1. Yes, that’s what I was referring to. And she could use the money she’s saving on the down payment to put toward a new roof. Thanks, Colin!

  24. My husband and I are buying his grandmas house for 60,000 from his mom and aunt. Its valued online for 98,000. We have been approved for a loan of 120,000. We are planning on using extra cash for fixing up and rennovations. The house is paid off, and no liens. Will his mom or aunt have to pay any more taxes than the 30,000 each gets? Also, do we need a lawyer, or can we just sign a contract?

    1. Hi Karen:

      I want to make sure to note here that you can’t use the extra amount of money from your loan to finance renovations. If you’re planning on paying $60,000 for the house, you’ll only use $60,000 of that loan. Unless you’re planning on using an FHA 203k, which would allow you to use the money from the loan for both home improvement as well as home purchase. At this time, Quicken Loans does not offer FHA 203k loans. As for your tax question, I would talk to a tax expert, as we primarily deal with home loans. Lastly, I would suggest instead of a contact, you seek a quickclaim deed. While you might not need a lawyer with a family transaction, it never hurts to have an unbiased professional working to protect the interests of your family members and yourself. But ultimately, it’s up to your discretion. I hope this helps!

  25. A family member owns a home that is paid off. Current value is about 610k. Said family member wants to help another family member out and sell it for about what they put into it which is around 400k.

    What are some possible ways of doing this?

    1. Hi James:

      This arrangement is called a gift of equity and the difference between the actual value of the home and the sale price becomes transferred equity to the buyer. It can be used for the down payment and closing costs. The seller just has to sign something saying that the buyer doesn’t have to pay them back. There’s more information on gift letters here. Hope this helps!

  26. My parents own the home we have been renting and we are considering purchasing it from them. The estimated market value of the home is $250k. We are thinking about getting a mortgage for $150k, with $50k going toward needed repairs and the rest to my parents. Is this possible? What kinds of issues could we run into? What are some possible options for making this work? Also, would we need to have a down payment as first time homeowners?

    1. Hi Melody:

      You would need a down payment as first-time home buyers unless you get a USDA loan (in eligible rural areas) or a VA loan. One of the only loan programs out there that provides a mortgage for both buying a house and renovations is the FHA 203K loan. Unfortunately, we don’t offer that at this time. I do wish you luck.

  27. My brother purchased a home from my now ex husband. He paid it off completely and has the receipt stating paid in full. He didn’t change the name on the deed and isn’t living in the house at this time, but has continued to keep up the grass and pay taxes on the property. Now my ex went to the courthouse and found out the deed was still in his name, broke into the house changed the locks and gave my brother a month to remove his personal belongings. My brother in turn placed a padlock on the home which the ex then removed. Who legally owns this home?

  28. A corporation is buying a house from my wife. I am a major stockholder in the corporation
    The sales price is undervalued appraisal by lenders chosen appraiser $710,000arv
    sales price $325,000
    Private lender is funding purchase price plus $120,000 rehab money. The agreement had been worked out between private lender, my wife and corporation
    Everything is alright with the corporation, my wife and the lender
    at last minute title company wants my wife to submit a family transaction questionnaire why what does it matter to them this could cause trouble Im not happy

    1. Good evening, Tom. I’m going to have one of our Home Loan Experts reach out to get some more data. They’ll be able to point you in the right direction.

    2. Hi Tom:

      If your major stakeholder and the house is being bought from your wife, it could be considered a non-arms length transaction and those have different requirements. They’re doing their due diligence. I’m sorry. You’ll have to go through the process. I would talk to the lender about next steps.

  29. My grandma took a loan out on her house about 10 years ago, and she currently owes about $9,200 left. She is wanting to give me the house so she can downsize. Is it better for me to give her the money to pay off her loan, then her gift me the house? Or me buy the house directly? It is written in her will that the house goes to me, but she has debt and we are worried they will go after the estate. What tips do you have to help with this process, and to ensure that I receive the house with the minimum of taxes and fees?

    1. Hi Chevelle:

      Giving her the money and then doing a quitclaim deed to get the house in your name is certainly one option. You would just stipulate that she gets the $9,200 or whatever the final amount is when you do the quitclaim. You would want to make sure she contacts her mortgage servicer (the people she pays the bill to) in order to make sure that the payoff goes properly. However, if you do that, you don’t receive any tax benefit. If you pay on the mortgage, then you can deduct any mortgage interest from your taxes if you itemize. You could also assume the current loan from your grandmother if you wanted in order to just take over the payments. You would have to credit qualify and do it with the permission of her lender/servicer, but it can be done.

      You can try getting a mortgage for that amount to just buy the house, but with the closing costs, it may not make sense to get a loan quite that small. You might have to get a personal loan. If that was the case, our friends at RocketLoans could help you. If you want, you can also talk to one of our Home Loan Experts at (888) 980-6716. We could go over whichever option might be best. Hope this helps!

  30. Hello,
    My husbands parents are wanting to down size and we are looking to buy there home. We have been approved for an fha home loan due to where we live. What do we need to do to start I would like as much information as possible to be prepared when going to the table on this deal. If you could help us that would be great.

    1. Hi Jessica:

      The good news is it sounds like you’re going to be buying your parents’ primary residence. Because of that, you’re able to put just 3.5% down if you want to. Also, if your parents are giving you a family discount on the sales price, the difference between the appraisal and your purchase price can be used toward your down payment. It’s called the gift of equity. They just have to write a letter gifting it to you. So you’ll have that option. There’s not that much else you need to know. You can’t both occupy the same residence, but that won’t be an issue if they move out.

      I know you said you’ve already been approved, but if you would like to go over your options and see what we can do for you, you can do so online through Rocket Mortgage or give one of our Home Loan Experts a call at (888) 980-6716. Thanks!

  31. I’m planning to purchase the house my wife and I are currently renting from her brother. Is there a minimum credit Score I must have in order to purchase it?? And also he is willing to give us a gift of equity for the down payment and closing cost. How should we prepare ourself’s??

    P.s. Thank you in advance.

    1. Hi Ray:

      The minimum credit score depends on the type of loan you’re getting. For an FHA loan, the absolute minimum credit score given other good qualifying factors is 580 median FICO. The VA doesn’t mandate a minimum credit score, but lenders can set their own and we require a 620 median FICO. On a conventional or USDA loan, the required median FICO is 620. Beyond that, if he wants to give you a gift of equity, you have to have a gift letter. If you go with an FHA loan, you may need a minimum gift of equity of 15% because it’s not his primary residence.

      I’m going to recommend you speak with one of our Home Loan Experts at (888) 980-6716. They’ll be able to give you detailed information. Have a great day!

      Thanks,
      Kevin

  32. My mom passed away and left her 4 children the house. The will says to sell it and split the proceeds. My brother and i would like to buy the house. Could we just get a loan for the amount of what we owe my other two siblings and we just do a quit claim?

    1. Hi Carolyn:

      I’m not sure how that works because you already have a claim to the title. We might be able to help you do a cash-out refinance. Then you would pay off the other two. I’m going to recommend you speak to one of our Home Loan Experts at (888) 980-6716.

      Thanks,
      Kevin

  33. Kevin:

    My mother is 88 years old and lives alone and has a will leaving the home to my sister and I upon death. Due to her age I am concerned eventually she could need to go into assisted living or a nursery home. I am concerned about the house being an asset. My sister and I are wondering if it would be smart to purchase the house from her? We want to keep the home after her death. Can you provide any advice?

    Thank you

    1. That can certainly be an option, Veronica. In terms of whether it’s a good one, unfortunately, I’m not an expert in Medicare law and you should probably talk to an elder law attorney who is. If you buy it from her, then she has the assets from the sale, so I’m not sure how that works.

      Thanks,
      Kevin

  34. I am buying a home from my father in law been here for about 7 years now I am the one paying the bank and taxes but I really would love to get it in my name before something happens and the family steps in my credit isn’t so great so I don’t think I can get a loan is there anything I can do about this please help thank you i don’t owe much more on the house maybe around 10000

    1. Hi Clayton:

      It may not make sense to get a mortgage in the amount of $10,000. With a loan amount that small, it’s hard to make it makes sense once closing costs are factored in. You could look into a personal loan depending on your credit through our friends at RocketLoans. The other option is for him to quitclaim the property to you and letting you just keep making payments on the loan until it’s paid off. You can choose to pay him something for the property this way while still paying on the current loan. If you did this, you would just have to work with the bank to make sure you could officially assume the loan first. That way, they wouldn’t call it due upon the deed transfer.

      Thanks,
      Kevin Graham

      1. Kevin –

        Is that not against most loan terms? When a deed transfer occurs a bank can make a demand clause.. right?

        1. You are correct. We misspoke in that initial comment. I’ve edited it so the right information is there. Thanks for speaking up!

  35. I was lead to believe I was renting to buy a home from family I’ve spent over 30000 and now apparently the original owner which wasn’t paying mortgage that’s why I took over is now evicting me wife 4 kids I paid for thousands of dollars in repairs fixing the home is there some law or something that either gets my money back or house cuz I dnt see how them lying and me paying the mortgage so they can kick us out is fair is there anything that can help me

    1. Hi Richard:

      In terms of staying in your home, I would contact a local attorney. Different states and municipalities have differing laws on the books. It’s a long shot, but you could also try reaching out to the actual lender and see if they can do anything to work with you. I would also look into civil options to possibly sue the owner of the house for breaching your agreement, particularly if you have written statements of responsibility.

      Thanks,
      Kevin Graham

  36. My father and uncle owned the famiy home. My uncle died and his share of the house went to his sons. My father died a few years later and he willed his property to me. My cousins no longer wants the property and have asked me to buy them out. They are willing to do a quit deed for $1.00. I have to pay them half of the house value. Do I have to report to the IRS what I paid them?

    1. Hi Mike:

      I’m not a tax expert and I would advise you to talk to one. However, I think the tax burden would be on them for any money they made from the sale. As I said though, talk to a tax person for the best advice.

      Thanks,
      Kevin Graham

  37. You told us about lot of benefits to buying a home from a friend or relative but according to me mixing home sales and family can be a sticky business. Here are a few other things we should consider before purchasing a house from family or friends. This isn’t because you don’t trust your friend or relative, but because we aren’t well-versed in the legal aspects of purchasing a home.
    we buy houses

    1. Hey Alan! Thanks for your comment. While we did list a few benefits of buying a home from a friend or relative, we did mention a few things to consider before going through the process. Like you said, it can be a tricky situation. There might be obstacles with getting a loan, the possibility of family strife or even a sudden shift in the seller’s financial situation. That’s why we listed our “pro tips” at the bottom to help you prepare, should you purchase the home from a close one. These include making sure the family member is current with their mortgage payments, working with a title company and getting legal advice to help with all the paperwork. Hope this provides some clarity! – Allison

  38. Hi-
    My spouse and I nearing the time where will be shopping for a mortgage in order to buy a home from a relative. We are getting the house at a good price (possibly half the market value for the area). At this time, we only have a verbal agreement on the price. We know the relative has taken out a loan against the house for the price that was verbally agreed upon. The relative plans to pay off the lien they have on the house with the sale to us. What sorts of things should we prepare for when shopping for a mortgage in this non-arms length transaction?

    1. Hi:

      It’s possible that you would have to make a higher down payment with certain types of loans since it’s a non-arm’s-length transaction. That being said, since you’re buying from a relative, the discount on the sales price can also be given as a gift of equity with the proper gift letter documentation. In this scenario, the discount you are getting on the sale can be counted toward the down payment. You’re getting free equity. One of our Home Loan Experts could go over this with you and talk about the requirements in greater detail at (888) 980-6716, but those are the sorts of things you should know going into the transaction.

      Thanks,
      Kevin Graham

  39. My mother -in-law passed in Jan. My husband is the power of attorney . There is no estate, it is a revolving trust. We are trying to sell the house to our daughter. She is pre- approved thru a local bank. We had it appraised, but we want to ask a smaller amount for it, needs repairs and updated. My husbands sister is only in the will as a successor if my husband dies. We hired an attorney but she will not sign the asking price, she wants more. Where do we go from here. We will not sell to anyone else and we will not sell for more than it’s worth. Any suggestions? Is there any way besides an arm length transaction without her consent?

    1. Hi Pam:

      I’m very sorry to hear about your mother-in-law. There are a couple of things that come to mind here. For starters, the property itself may have to be out of the trust before it can be transferred to anyone else. This is where you going to have to rely on your attorney, because I’m not a lawyer. If your husband has control of the estate and it only passes to his sister if he dies, I’m having a hard time seeing where she comes into the picture here. That said, I’m not an expert in local law. As far as not selling for more than it’s worth, it’s worth whatever the appraiser says it’s worth. Also, as far as arm’s length vs. non-arm’s-length transactions, I don’t think it would matter in this case. If for some reason you needed his sister’s approval, you would still need it no matter who you sold to. I know that’s about as clear as mud, but I would talk to your attorney and those are the issues you have to think about.

      Thanks,
      Kevin Graham

  40. my wife’s aunt is to old to take care of her house.she wants to let us finish paying for it.how do we go buy putting out name on the lease.

    1. Hi David:

      Assuming it’s a regular mortgage, she would do a refinance and put your names on the mortgage. She can choose whether or not to add you to the title at that time as well. Hope this helps!

      Thanks,
      Kevin Graham

  41. Hi!

    We are planning to buy the home we’ve been living in for the last year which is owned by my wife’s grandmother, father, and 2 aunts with no liens/loans. Price is agreed upon but we don’t quite have 20% of the asking price. An appraisal has not been conducted. Should my first step be to hire a real estate attorney? Are there any concerns I should have regarding requirements since it is a non-arm’s length transaction?

    Thank you!

    1. Hi Tom, Speaking to a real estate attorney will help and it would also be a good idea to talk to one of our Home Loan Experts by calling (888) 980-6716, who can give you more information based on the situation you are describing.

  42. I HAVE A HAMP MORTGAGE. WOULD MY DAUGHTER BE ABLE TO ASSUME MY MORTGAGE ON MY DEATH AND HOW CAN I PUT THE HOME IN HER NAME NOW

    1. Hi Bernice:

      The modifications you have on your mortgage have nothing to do with inheritance. Therefore, if the property was left to your daughter upon your death, she would be able to assume the payments. If you want to put the property in her name now, that’s something you would have to talk to your mortgage company about because that’s potentially a refinance transaction. I would talk to them. If you’re in the middle of the modification, they may or may not be able to help you with that.

      Thanks,
      Kevin Graham

  43. I want to buy the house my parents live in and then rent it back to them. Is there any issue with this? Purchase price is discounted with gift equity but rent will be fair market value.

    1. Hi Dan:

      It’s my recommendation that you speak with one of our Home Loan Experts. This gets a little complex and they’ll be able to give you the best advice. You can get in touch with them by filling out this form or calling (888) 980-6716.

      Thanks,
      Kevin Graham

  44. My husband and I are buying a house from his grandparents. They do not have a mortgage. We are paying cash. Do we need an appraisal for IRS purposes to figure fair market value on the home? Is there a way to get around that. Can we use the assessed amount for property taxes for the fair market value? We believe they are selling for less than fair market value.

    Thanks,
    Amy

    1. Hi Amy:

      I’m not a tax expert and we generally avoid giving tax advice because that’s a very specialized profession. An appraisal would be one good way of determining fair market value. This appears to be the top method the IRS recommends for evaluating real estate. You can’t really use the taxable value of the property because there tend to be exemptions and you’re just getting a range sometimes. Depending on where you’re at, in the grand scheme of the transaction, an appraisal is not all that expensive.

      Thanks,
      Kevin Graham

    1. Hi Meg:

      With a purchase, there’s pretty much always some sort of appraisal that has to be done. Lenders aren’t allowed to lend more than a property is worth, so value has to be established.

      Thanks,
      Kevin Graham

  45. My husband and I currently own two homes, one is our primary residence. The other we have been preparing to sell. My sister approached us about potentially owning the home. Due to her large student loan debt she has not been able to qualify for a home loan. We are considering some type of rent to own but are not well versed in the process. Could she move into the home, pay us monthly toward the mortgage and once the house is paid off we transfer the deed to her name? She would be responsible for all home repairs/maintenance while living in the home. Our taxes are included in that mortgage. Would we change our home insurance to a rental policy while this took place? I’d love to hear your thoughts.

    1. Hi Erica:

      We don’t do rent-to-own mortgages, so I’m just going to speak about the process generally. One of the things you would have to do is call your mortgage company and let them know you’re converting your primary home to an investment property. It depends on the terms of your mortgage contract, but generally if you’ve been in the home a few years, you can convert the property without changing your interest rate to the higher one that would normally be associated with investment properties. You would also have to call your homeowners insurance company and let them know. They’ll likely charge you a slightly higher rate because it’s now a rental property. Other than that, what you’ve outlined could be done.

      I will tell you the policies around debt-to-income (DTI) ratios and student loans have recently changed, depending on the type of loan she’d be looking at. If she’s interested in buying the house, we’d be happy to help her look into her options if she calls (888) 980-6716. Hope this helps!

      Thanks,
      Kevin Graham

  46. My fiance and I live in his mother’s home (we have been living here and paying the mortgage for 9 years) we want to purchase the house from her for close to what she owes on the current mortgage, or take over her payments. how do we do that? (it would be between her and I as we aren’t married and He is a stay at home dad)

    1. Hi Tammy:

      You have two different scenarios here, so I’m going to take them in turn.

      If you buy the home for about what she owes, you would be having her do a gift of equity by getting a discount on the sale price compared to what the home would be worth on the market. She would sign a gift letter stating that you didn’t have to pay back the gift. We could go over how that would work if you went that route.

      If you just took over the payments, that’s an assumption. In order to do this, you would have to gain permission from whoever is currently servicing the loan. You and your fiancé would have to qualify based on your credit. It also depends on the servicer. Not everyone allows assumptions.

      Should you choose to buy the property, we can help you there. I’m going to recommend you get started by talking to one of our Home Loan Experts by calling (888) 980-6716.

      Thanks,
      Kevin Graham

  47. Family estate property whereas the county tax collector priced it at 15000.00. I’m trying to buyout 3 others family members, Attorney has prepared the Warranty Deed, Do I need a sales contract once I make the payout?

    Thanks Bob

    1. Hi Robert:

      I would follow the advice of your attorney, but if the deed is prepared, and you have an agreement with your family members, you probably don’t need to prepare a purchase agreement. You could choose to write something up for everyone’s records.

      Thanks,
      Kevin Graham

  48. I want to buy my brother,s house that I currently live in that need repairs. The house have a active mortgage on it. How can I get a rehabilitation lone and purchase the house at the same time?

    1. Hi Nikki:

      We don’t do these, but if you want to buy the house and rehab it at the same time, you might look at an FHA 203K loan. Hope this helps!

      Thanks,
      Kevin Graham

  49. My brother in law wants to sell his house to me for $1 but he still has a mortgage on this home. How would this process work?

    1. Hi Mike:

      You have to get in contact with his lender and get permission to assume the payments. Some lenders will allow this and some won’t, but that’s your next step.

      Thanks,
      Kevin Graham

  50. Hi- My parents purchased my condo all cash in December 2014. I purchased the condo from them (For the same price) in Feb 2016 and they carried the remainder. I now want to sell this condo. I have used this as my primary residents since the purchase in 2014. Since it is my family I purchased it from, do I have to wait till Feb of 2018 in order to not get hit with capital gains or can I sell it now and be ok since we have held it for over 2 years?
    Thank you!

    1. Since this deals with taxes, the best advice I can give you is to talk to an accountant or tax preparation professional. We don’t really specialize in financial advice of that sort.

      Thanks,
      Kevin Graham

  51. My mother passed away nearly 6 months ago. Her estate/home was left to my sister and me equally. The house is paid for, mom and dad paid cash for everything. I am wanting to buy my sister’s portion of the house but I’m going to be a little short, about $12,000.00 Do I take out a mortgage for that amount? My credit union dais I would just need a home equity loan, which I can pay off in a very short time. Advise.
    Thanks

    1. Hi Wayne:

      We don’t do home equity loans, but we do offer cash-out refinances. Because you would be paying your sister with the proceeds from the mortgage, I’m going to recommend you talk to one of our Home Loan Experts to make sure you’ve gone through all of your options and that this is the best way to go about it. You can get in touch with them by filling out this form or calling (888) 980-6716. Hope this helps!

      Thanks,
      Kevin Graham

  52. I want to buy my ex-stepfather’s house so he can have some cash to live on while continuing to stay in the house a low rental fee (so I can write-off some costly repairs that need to be done). He owns the house free and clear. Is there a simple form available on the internet for me to complete this transaction for everyone’s legal protection?

    1. Hi Michelle:

      Just so you know, we wouldn’t do a mortgage on this one because you can’t both occupy the property. That being said, you could get this done with a quitclaim deed and pay him consideration. That’s how you would complete the transfer.

      Thanks,
      Kevin Graham

  53. My mother and her parents own the house that I am currently living in and caring for, none of them live in the home/state. A few years ago they refinanced, and now have two mortgages.
    Assuming I meet all the requirements, I would like to know if it is possible to become the owner of the home and assume the mortgages (which are conventional)? And if it is possible, I’d like to know my options in doing so.
    Also, I’d ideally like to do this by having only one mortgage, having a lower interest rate, and not having to buy the home at a higher price.

  54. I am 1 of 4 heirs to the family home, and I would like to buy out the other 3. I have VA benefits, and would like to know what is a good way to get a fair market value for the other 3 to consider. I also would like this to be done ASAp and only a 15 year note.
    Thanks

    1. Hi Nick:

      I think the best way to get started would be to talk about your options with one of our Home Loan Experts who will be able to provide more insight into what could be done in your situation. You can reach out to them by filling out this form or calling (888) 728-4702. Have a good day!

      Thanks,
      Kevin Graham

  55. Hi,

    My husband and I want to purchase my In -law’s home so they can move up north. They own the house free and clear. What are some of the options when buying a home from a family member?

    1. Hi Angie:

      It’s definitely something we can go over with you. The exact requirements depend on the type of loan you’re getting. I think it would be best for you to talk to one of our Home Loan Experts by filling out this form or calling (888) 728-4702.

      Thanks,
      Kevin Graham

  56. I am in the process of moving into a home that my grandparents own. I currently own a home and would like to sell my house and purchase theirs. The problem I want to escape from is Identity of Interest. I would like to get a loan for the full value of the house but I am not sure what to do to get rid of this Identity of Interest problem?

    Thanks,
    Mandi

    1. You can’t get a loan for the full value of the house unless it’s VA. There’s always some down payment involved. However, as long as it’s your grandparents’ primary residence, you should be able to make as small a down payment as possible. The primary residence rules also only apply to FHA, so if you got a conventional loan, you would be OK. Hope this helps!

  57. I lived with my Mom for 8 years until she passed away and I am still living in the house. I was wondering if there was a way I can get a bank loan to buy the house and also be able to provide my sisters there share of the sale of the house.

    1. Hi Elizabeth:

      Since you’re occupying the home, you can’t sell the house to yourself. If you were ever to sell the house to someone else, you could give your sister her share at that time. I’m sorry, but hopefully, this gives you an idea of where you stand.

      Thanks,
      Kevin Graham

  58. Hi, my mom wants to sell me her house. She doesn’t owe anything and is up to date on taxes. My credit is poor. She is selling to me way under the houses value. What steps do we need to take? Thanks for your advice.

    1. Hi Frances:

      You may want to take a look at improving your credit. I’m going to recommend you take a look at our friends at QLCredit. You can pull your credit report for free without affecting your score. Once you do that, the service will give you personalized recommendations on steps you can take to improve your score. Mortgage lenders require a 580 in order to approve you for an FHA loan. In order to apply for conventional financing, a 620 score is required. I hope this helped get you started!

      Thanks,
      Kevin Graham

  59. On September 7, 2016 my mom suffered a massive stroke. On September 18, just 11 days later, my dad passed away. My mom is recovering in a nursing facility, but once her rehabilitation is over she will not be able to live on her own. She will be moving to a long term care facility. My sister is power of attorney for my mom and her estate. My brother and his daughter would like to buy my parents home. The home has been paid off for years. What steps do we need to take in order to sell my parent’s home to them? Thanks for your guidance.

    1. Sorry to hear about your parents. I’m going to recommend you talk to one of our Home Loan Experts. The power of attorney is a variable I’m not sure about and I want to make sure you get the right advice. If you call (888) 728-4702, someone will be happy to speak with you.

      Thanks,
      Kevin Graham

  60. My parents are legally separated and are going towards divorce. My dad moved out a few years ago and my mom still lives in the house. My mother has been going through financial hardships due to having cancer. My dad is pushing to sell the house or have her buy him out but she cannot afford that. Is it possible for me to take over their loan and have the house be in my name? This would be my first time buying a home. Would it be a short sale? How do I begin if it’s possible?

    1. Hi Emily:

      I’m sorry to hear about your mother’s cancer. It’s not a short sale if you assume the loan. However, your parents and you need to get in contact with their lender in order to seek permission to do an assumption. They don’t always let you do it. In addition, you would have to qualify with your credit. Your next step, though, is to make contact. Good luck and I hope for your mother’s better health.

      Thanks,
      Kevin Graham

  61. My son is going to purchase my home. (the current mortage is completely up-to date and all taxes have been pain on time). I am selling it to him for basically what I owe on it. What are steps that we need to take and anything in particular we should watch out for? He has already received pre-approval for the mortgage. Would love for him to put as little down as possible in order to avoid taking all of his savings. Do we have to have agents or is this something we can do on our own? If the home is valued at at approximately $15-$20k more than what I am selling to him, does that help or hurt? He won’t sell it within a few years, so won’t need to worry about capital gains. What is the time-frame all of this can happen? and how easy or hard is it to do?

    1. Hi Andrea:

      If it’s a single unit primary residence, you shouldn’t have to worry about him having to make a higher down payment than normal. In fact, if your house appraises for more than the sale price, he can use the difference as a gift of equity toward his down payment. There’s no real need for real estate agents. I also don’t see this taking any longer than the normal mortgage process. Hope this helps!

      Thanks,
      Kevin Graham

      1. I have a similar situation to Andrea, except it would be my aunt selling me a floor (condo) out of her 3 family. Would be my primary residence. Would that change anything? Also, I am a first time buyer what type of mortgage would I apply for / be eligible for?

        1. Depending on the type of loan you get, your down payment may be higher because it’s not your aunt’s primary residence. However, that’s not always the case. In order to give you more definitive information, we would need to know what types of loans you qualify for, so at this point, it would probably be best to talk to one of our Home Loan Experts by filling out this form or calling (888) 728-4702.

  62. Mom died shortly after sigining the house over to me. Me and my family moved in with her about a year agao. She made all of the bills and payments. She has a VA loan on the house. I have never been in any branch of the service. The house (deed) has my name on it. Do I have to refinance it or can I just keep making the payments under her name and her loan? She also let me sign my foreclosed home over to her. It sold in auction for $35,000 less than is owed. That cant come back at me can it? She got a bill from the state for the difference since the house was in her name when she died.

    1. Hi CS:

      Since she passed, you should be able to call the company and just assume the VA loan. Your larger problem stems from the fact that the foreclosure was in her name Since she voluntarily assumed that your debt, it doesn’t die with her and whatever resources the estate has have to be used to pay the bill. Or as much of the bill as possible. Probably not what you wanted to hear, but I hope this helps clarify things.

      Thanks,
      Kevin Graham

  63. Wife and I would like to purchase a second home from her uncle. He owns the property free and clear, it is not his primary residence, and he’s owned it for years. Our initial plan was for him to quitclaim deed the residence to us, us to take out a HELOC on it since we would then own it, and pay him from that loan. Are there still “gift tax” ramifications for either of us if we do it that way? Is there a better way to go about it? Also, would a sales contract need to be executed for FMV so that it doesn’t trigger any IRS looks?

    1. Hi Shawn:

      I can’t speak specifically to the tax ramifications because I’m not a tax specialist. I can tell you that typically when there’s a quitclaim, the person is paid a consideration for the property, so you would pay him something at the time of the sale.

      Thanks,
      Kevin Graham

  64. I am looking to purchase a property from my mother next summer. I have lived in the property in the past but not for the last few years. I would be looking to purchase the property and rent it out similarly to what it is used for now. What would be some ways to look to into transferring ownership of the property? either a sale or gifting the house?

    1. Hi Craig:

      You have the option of buying the property from her just as long as you’re not living in the property at the time. Depending on the type of loan you get, there may be some different requirements because it’s a non-arm’s-length transaction. It would probably be best to get started by talking to a Home Loan Expert if you wanted to get a mortgage. If you don’t want to do that, she could transfer the property to you via quitclaim if she just wanted to gift it over to you. Typically in those situations, some consideration is paid for property interest though. You can get in touch with one of our experts by filling out this form or calling (888) 728-4702.

  65. Wanting to purchase my mothers house. We’ve been renting for approximately 4 years. We have proof as well. She owes approximately 200k. It’s worth around 300k. We’d like to purchase but also take equity out for updating. What’s the process? How difficult with taking equity out. She doesn’t want anything for the home if that makes a difference.

    1. Hi Greg:

      So if she doesn’t want anything for the home, you could theoretically assume the loan and just take over the payments, but every mortgage company has different policies and it might depend on the type of loan she has in terms of whether you can do that. That’s one option I might look into. The other is that she can give you a gift of equity based on what she has built up over the years and you can get a new mortgage for the $200,000 you think the property is worth and then take cash out after you’ve been on title for between six months to one year depending on the type of loan you get. The advantage of the gift of equity is that it gives you money to play with and a cash-out scenario while leaving her money to pay off the existing mortgage. This all assumes that you’re correct about the value of the home. If you would like to get in touch with one of our Home Loan Experts, you can go ahead and fill out this form or call (888) 728-4702. Hope this helps!

      Thanks,
      Kevin Graham

  66. Okay we are in a mortgage process with another company unfortunately haha, but we just found out that since we have been living in the home that we are buying from our sister in law, she is considered family and that the fha loan will be a 15% down payment, which we just found out and took the lender weeks to let us know this, so now we do not even have enough money set aside for down payment which is unfortunate, but we asked the lender if we could get a different loan is there other options for our specific situation, and they told us yes a conventional loan but that too would be 15% down payment? is this true or is it just their mortgage company??? there based in California and I live in PA, so I was just wondering how true are they being to us? how does this work? any information would be helpful, they told us if we provided 6 months of proof that we paid rent that can give us a 3.5% down payment but unfortunately we were not paying rent, they were helping us out because they are our family and family helps out family but it seems in our world of laws it’s not possible to help each other out a little! they are moving and need to sell as soon as possible we are willing to buy and want this house to be our permanent home but it is very difficult! Please provide me with any and all info you have to help us! thank-you

    1. Hi Justin:

      I think I have some good news for you. While it is true that for FHA you would need a 15% down payment since you’re buying from your sister-in-law, you can get a conventional loan through us for a more normal down payment of 3% or 5%. The only potential problem is that when you apply, you can’t be living in the same house as your sister-in-law. I’m going to recommend you talk to one of our Home Loan Experts to go over your options. You can get in touch with them by filling out this form or calling (888) 728-4702.

      Thanks,
      Kevin Graham

      1. so what if we do live in same house, then no matter what I would need an fha loan with 15% down?? technically this is a duplex home, one big house with a wall in between making it more like 2 houses, they live on one side and we live on other side, but the sister in laws name is on the deed to house but its not paid off yet, but they want to move and we want to stay there we are settled so we want to buy house off of them, so we do kind of live in same house although it is not considered one. there is 2 sewer and 2 water bills its not on same bill becuase it is not considered one home but we are buying both sides of home, we are buying our side and their side it is 60,000 for the entire house both sides. if we were to get a gift from a family member to cover the costs for the 15% down payment will we need a gift letter? and if we do this will the lender look into my family member and see where they got the money from to give us?? will we need to support documentation proving where my family member got the money from or no? should we just go to a notary to the hift letter

        1. Hi again Justin:

          Everything I just told you assumes that it was a one-unit property, not a duplex. If it’s a duplex, unfortunately, the minimum down payment is 15% either way unless you pay rent for six months. You could get a gift or have your sister-in-law give you a gift of equity. It’s just important that whoever you get the gift from realizes you can’t legally pay them back. If you do get a gift letter, I would follow the instructions of the lender, because they’re going to need some very specific documentation from you. We have more information on that in this blog post. I know it’s not the answer you want to hear, but hopefully you know where you stand.

          Thanks,
          Kevin

  67. Great article ! So my in-laws bought a house earlier this year. My wife and I have been living in it since then and are ready to purchase it. The house is paid in full so no mortgage on it but the 15% down for FHA would be tough for us to obtain. What would be the best option for us to make this purchase ? Would you we be able to purchase the home just through for sale by owner?

    1. Hi Mack:

      I’m going to take your second question first. For sale by owner doesn’t necessarily mean there isn’t a standard mortgage. It just means that they’re selling without a real estate agent. What you’re thinking of is a land contract, which is one option. It doesn’t afford the protections for the buyer of a traditional mortgage. Something else you could look into is a conventional loan. If you qualify for a conventional loan, you can buy the property with a down payment as little as 1%, 3% or 5% depending on your qualifications. I’m going to recommend you talk to one of our Home Loan Experts by filling out this form or calling (888) 728-4702.

  68. We are currently in the process of buying the house we have lived in for 8 years from my parents. They have never lived in this house. The appraiser put in the notes we were related now our loan officer thinks we have to put 15% down instead of 3.5%. It’s an FHA loan…have you heard if this?

    1. Hi Rebecca:

      I hate to be the bearer of bad news, but this is standard FHA policy when it comes to people that are buying from family. The transactions are viewed as a little more risky because there’s always the chance that you’re trying to bail them out. They make up for this by requiring a 15% down payment. I know it’s not the answer you want, but at least you have the correct info now.

      Thanks,
      Kevin Graham

      1. I have read that the 15 % down payment can be reduced to 3.5 if you have been renting the home for 6 months. Does anyone know for a fact whether this is true or not?

        1. Hi JoJo:

          The rental exception for the 15% down payment to get it down to 3.5% on FHA does exist. We just need to see six months of rental history.

          Thanks,
          Kevin Graham

  69. I want to buy my parents’ home in Texas. The title company does not want to insure the property because of Texas Homestead laws and this is my parents’ only property. So, essentially I cannot obtain a mortgage because no title company will provide title insurance. Are there any other alternatives?

    1. Hi Marc:

      if they’re not moving out, you’re going to have issues getting a mortgage, but you may be able to do a land contract with your parents. That’s something I would look into.

      Thanks,
      Kevin Graham

  70. My wife, our son and I jointly own a home where my son currently lives. We have jointly decided that he does not want to be on the deed (as he is getting married) and does not want to be a joint-owner with us. How can we remove his name from the deed so that he is no longer a joint-owner? Alternatively, can we sell the home to ourselves (i.e. from my son, wife and myself to my wife and myself) at the current FMV? Any other options to accomplish transferring the ownership/deed from 3-of-us to 2-of-us? Also, will appreciate if you can explain the tax implications of the alternatives. Thanks.

    1. Hi Klos:

      You can’t sell the home in the traditional sense because you would be selling to yourselves. What you do in this case is a quitclaim deed. You can work with the mortgage company on this to have it done at the same time as you refinance him off any existing mortgage. He would be paid whatever consideration you agreed upon for his ownership stake and he would potentially pay capital gains tax on any increases in value that his stake has seen since you bought the property.

      Thanks,
      Kevin Graham

  71. Hi My brother in law had the home i now live in from a previous marriage. His ex wife almost lost the home, My sister and brother in law asked if we were interested in one day purchasing it and askked me to move in and make the payments. How complicated will it be for us to purchase it from him.

    1. Hi Michelle:

      It’s doable. You may have to provide additional documentation and if you go with an FHA loan, you’ll have to put down a down payment of at least 15%, there are other potential loan programs. My advice would be to talk to one of our Home Loan Experts by filling out this form or calling 888-728-4702.

      Thanks,
      Kevin Graham

  72. Need advice!
    My wife and I currently live with my brother and the house is under his name. He was laid off and is now behind in his mortgage & they will not accept any payments other than the full amount he owes. Is there a way he can sell us his home & continue living with us? He currently owes about 70-80K and the house is appraised 145K.

    1. Hi Carlos:

      Unfortunately, the buyer and the seller in the home cannot occupy the property at the same time. In this instance, maybe there’s a way you can split the mortgage payment to help him out or see if the lender will do a modification to his current loan. In order to do that, he would start by contacting his servicer. That would be my advice for your next point of contact.

      Thanks,
      Kevin Graham

  73. I’m staying in my sister’s house she moved about 7yrs. ago she told me to treat it like it was mine. So I did, put new carpet, remodel the kitchen, tile floors. She file bankruptcy now the house in foreclosure. I’m trying to purchase it for what she owe, but now I can’t because of the arm’s length law. I got too much money in it to let someone else get it. Looking online I seen where if I talk to the mortgage company let them know that it will be my home and she’s selling to me for the balance of what she owes, maybe they will let me buy it. please help me understand. Thanks

    1. Hi Maverick:

      I would talk to the bankruptcy attorney and the lender because I’m not sure how this works if she’s already in the bankruptcy process, but I would look into whether the lender will let you assume the mortgage under its current terms. That would be my advice. It’s something to ask about and may be your only option if you can’t buy the property.

      Thanks,
      Kevin Graham

  74. My grandmother owns her home and it is paid off. She wants to sell it to us but I’m not sure if my wife and I would qualify for the price she wants because my wife is in school and has no income. After she graduates in a few months and begins working, the price shouldn’t be an issue. I’d like to eliminate the use of a realtor since I alreday have a relationship with my grandmother and that would save her and me some money. Are there any ways to finance this housing situation by using my grandmother as the bank or some other way that you can think of? Also how do I know if the house would be able to be financed through an FHA program or some sort of first time homebuyer program?

    1. Hi H.E.:

      You could theoretically get into a rent to own situation with your grandmother. It may be better for you to just buy it from her so she gets the money and doesn’t have to deal with it. You can finance a normal mortgage even when you’re buying from family. It’s just that the requirements may be different. I recommend you fill out this form or call 888-728-4702 in order to talk to one of our mortgage bankers and get advice on your situation.

      Thanks,
      Kevin Graham

  75. I am in the same predicament. My sister and her three children own 50% and I own the other 50%. I am looking to buy her out and the home was appraised at $329,000. I have money tied up in annuities and don’t wish to spend that money. What type of loan could I apply for and what length would be good so I don’t get in over my head?

    Cordially,
    Mike

  76. My dad’s house has a reverse mortgage.
    I’ve lived there since he bought it on 06
    With still to this day. The property has the lien around $100,800.00
    Its easliy worth 200,000-300,000.
    He wants me and fiance to buy it so it’s outta his name and the loan from rms is paid. So in the event he passes away we aren’t being kicked out. He only wants us to pay 150,000. So that takes care of the lien and then some. We will still love together the 3 of us as we have been.
    We are first time buyers. Any suggestions?
    Also I don’t see the need for a real estate agent.

    1. Hi Doug:

      First, with a reverse mortgage, you’re not automatically kicked out if and when he passes. As his heirs, you would be allowed the opportunity to refinance the loan into a regular mortgage and then it would be in your name. You will just have to have him name you in his final will as having the house. That may be the easiest option. If you don’t want to do that, I suggest talking to one of our licensed bankers to go over your options. You can do so by filling out this form or calling 888-728-4702.

      Thanks,
      Kevin Graham

  77. My wife and her ex husband agreed in court that he was to pay her half the fair market value of the home they had together which came in at 290,000.. He then informs our attorney he has a buyer at 260,000 and he owed 245,000 and sent her a check for the difference of the payoff and actual sale price.. The kicker is the buyer was his mom, my question is that shouldn’t he had to pay on the 290,000 which was fair market value and wasn’t it a non arms length transaction bc his mom bought it way under fair market value.. Just smells like some home cooking here

    1. Hi Terry:

      It’s a non-arms length transaction. Legally, there’s nothing wrong with that, but if she had a separate agreement with her ex, that might be something I would try to talk over with an attorney.

      Thanks,
      Kevin Graham

  78. My mother and step father got divorced a couple of months ago. It turns out that my step father hadn’t paid the mortgage on the house 8 months, and not it’s 11 months in arrears, going on 12. I’d like to buy the house through a short sale and keep it rather than see it get foreclosed on. Buying the house for what is owed on it is out of the question as it needs a decent amount of repairs, and was already about 60K underwater before he stopped paying the mortgage.

    1. Hi Sean:

      I’m sorry to hear about your situation. It would be best if you talk to one of our licensed mortgage bankers that can go over the process for short sales. If you could fill out this form, someone will reach out.

      Thanks,
      Kevin Graham

  79. Hi I’m just wondering what our options might be. My fiance and I have been renting my brother’s home from him and my sister-in-law for the past 4 years. We are interested in purchasing it from them and they’re interested in selling it to us. The problem is my fiance and I both have very poor credit. Our household income is great we wouldn’t have any problem affording I’ve been on time with every month with rent for the past four years. We are wondering what our options are in getting a loan so that the mortgage being our names.

    1. Hi Krystal:

      At minimum, you’ll need a 580 credit score with FHA. For conventional loans, a 620 is required. If you fill out this form, I can have one of our licensed mortgage bankers reach out and offer any advice we might be able to give on your personal situation. Thanks!

      Kevin Graham

  80. My mom passed a few years ago and left her home in a living trust to me and my 3 brothers. We did a refi for some home improvements but only 1 of us had the credit for the refi and we dissolved the trust and only 1 of us is the now “legal owner” even though we all know that we all have a 25% stake in the house even though legally we don’t. One of my brothers (who is not the “legal owner”) will like to buy the home out right and live there with his family and buy the other 3 brothers out. What is the best way to go about this? Do we leave his 25% in the house and sale at a cheaper price? Is there a way to get back the original living trust and do a quit claim? We have an agreed upon buy out price for each but i’m not sure what is our first step.

    1. Hi Joseph:

      I’m going to have someone reach out because you’re getting into complicated issues of titles and trusts. It’s really better if we have someone look into your situation. They’ll be in contact.

      Thanks,
      Kevin Graham

  81. My Mom owns her home free and clear and wants to sell it to me and my husband . The home is worth about 40,000 and she’s willing to sell it to me for around 25,000 to 30,000 my husband and I both have steady income and could put forth a down payment but our credit is not great . This would be our first time buying a home. I prefer email mail contact thank you

    1. Hi Donna:

      We can definitely have someone reach out and go over this with you. Look for an email.

      Thanks,
      Kevin Graham

  82. My brother is buying a house from our sister ,that was the agreement.Now she just asked my brother to return the house back to her because she wants her husbands side of the family to live in it,giving my brother and his family until the end of the month to move out.He has paid payments for 4 years on time.Can she legally do this ?She has not fully bought the house herself but yet using my brothers money to pay for the purchase.They both agreed that he was going to buy the house and make repairs and pay the delinquent payments that she had prior him moving in.She promised she wouldn’t take the house away from him as long as her credit was still in good condition ,and it is.Please help me help my brother.My sister is scamming him.I would appreciate some input.Thank you.

    1. Hi Mary:

      I’m assuming it’s a situation where he’s cosigned on the mortgage or on the title. If she’s the only one on the mortgage and title, his options may be limited. That said, I’m going to have someone reach out to you to get contact information and see if we can offer any advice.

      Thanks,
      Kevin

  83. My daughter has been renting a house from me for about 7 years that I own free and clear. I have been reporting the rental income and depreciating the home on my Federal Income Taxes. I bought the house for $92,000 in 1999, it was built in 1986; the proposed real estate tax appraisal for 2016 $187,000. We want the sales prices to give her the benefit of not paying realtor fees or me paying capital gains taxes; and we want this to be an as-is sale, so the sales price should also reflect the work that needs to be done as the house is in a deteriorating shape.

    My daughter has saved enough money to put 20% down but she will need a mortgage. She has excellent credit and a good income and work history.

    Does this sound like something we will be able to do?

    Thank you in advance,
    Pam Miller

    1. Hi Pam:

      I’m not sure about the tax implications, but we can definitely have someone reach out regarding your daughter’s loan options. I’m going to have someone reach out to gather contact info and go from there.

      Thanks,
      Kevin Graham

  84. Hi, me and my husband are trying to purchase his mothers house, she inherited her mothers house when her parents passed away. The house we are looking to buy is paid off, it’s in his mothers name, and she is wealthy enough to hold the note on it. I am wondering if we will be able to dictate the down payment, the payments and whether or not there is interest? Plus we are going to pay the total appraised value of the house. She wants to just turn the house over to us, like gift it to us, and have us make payments to her so she can avoid taxes; is this legal? She is making an appointment with a lawyer and I was wondering what to expect. I have never bought a home so I really don’t have any relative information.

    Thank you

    1. Hello! Thank you for reaching out. Yes, I definitely recommend speaking with a lawyer, but I’ll also have a home loan expert reach out to you. They’ll look into your situation and provide suggestions. Thanks again for your comment. Have a nice Thursday!

  85. I want to purchase my mothers home in Maryland that I have lived in for over 10 years. She no longer lives with me and has moved out of state. Everything is current on the mortgage loan, as I pay this anyway. I have been pre approved for my loan and have disclosed with the morgtage loan officer that this will be non-arms length as the seller is my mother. We have a signed contract between us for an agreed upon sales price. The price is below market value but not extreme. Is there anything else that can possibly come up or that I/we need to do? I feel like this should be a fairly simple and easy process but now I have worry that this may not be so easy due to the family relationship etc. What advice can be offered? Thanks

    1. Hi Tiana:

      It sounds like you’ve taken the right steps up to this point. That said, I’m going to put you in touch with a Home Loan Expert who can help looking your situation and go over anything that might come up.

      Thanks,
      Kevin Graham

  86. Hello, I recently moved back to my hometown after working in DC for three years. I then began working for the family business with no break in employment. My parents offered to sell me a duplex (not too far below market value), and we wrote up a contract. When I spoke with a mortgage lender, she said I would have to pay a higher down payment since it is a duplex, but mainly that I couldn’t get a loan from them since I am related to AND working for the seller. I just find that hard to believe.

    Any help would be greatly appreciated.

    Thank you.

    1. Hi Alec:

      You will have a higher down payment when it involves multiple units, but I’m not sure about the second part of the question. I’m going to have one of our Home Loan Experts reach out to you to go over this in more detail.

      Thanks,
      Kevin Graham

  87. My husband and father in-law have a co-owned flat which is ready for registration. I want to find out if it is possible to register the flat against husband and wife and if wife can take a home loan against share bought from father in law.

    1. Hi Nidhi:

      I think by registration you mean having some title work done. If you have paperwork like a quitclaim showing that you legally bought the share in the property from your father-in-law, we may be able to help you, but I’m going to have someone reach out to get more information from you and see exactly what your situation is.

      Thanks,
      Kevin Graham

  88. The home I purchased ten years ago is listed under a non-arm’s length transfer, but I am/was in no way related to the sellers nor the agents. I was unaware and I’m still unaware of any relation between the sellers and their agents. The sale did take place under dual agency transaction and I’ve always thought that was the reason why it was listed as a non-arm’s length transfer. As I keep learn more, I can’t help but to feel like I’ve been had, but I can’t find solid information to support.

    1. Hi Jae:

      There are actually a lot of reasons something might be considered a non-arm’s-length transfer. Not only would it affect you if you had a direct relationship with the seller or seller’s agent but also if you were friends or if the appraiser or lender had a relationship with the seller. You could also have a non-arm’s-length transaction if either of you knew the closing agent or mortgage broker. There are a lot of factors, so it’s really hard to say.

      Thanks,
      Kevin Graham

  89. Me and my girlfriend have been living together for almost 2 years. Her parents own a second home. It’s a little small for us, but a great first home with a lot of potential. She said that she would be willing to sell it to us for well below market value to help us out. After reading this article and several similar situations in the comments, I want to make sure we do this the correct way.

    The home is still under mortgage, but has appreciated substantially since they bought it. Because we are not married, would this still fall under the non-arms length transaction if I just put the house under my name?

    Secondly, would we need a realtor for either party to complete the transaction?

    Third of all, I would like to add an addition to the house right away. Could we leverage a good rate and ask for more from the bank to immediately start The addition and find it through our mortgage?

    1. Hi Robert:

      You have questions of potential title changes and mortgage assumption. This all gets a little complicated to answer here, so I’m going to have someone reach out about most of this. I can tell you that neither of you is required to have a realtor to complete the transaction. Someone will be in contact about this other stuff.

      Thanks,
      Kevin Graham

  90. Our daughter & son-in-law own a house that they rent out at this moment and he is wanting to sell it to us. It is an older site build home and has already been checked for any foundation and structural problems, with absolutely none found. So we know we want the house, but we have to get out of our almost paid off double wide that we live in now. We are thinking of selling the double wide as is ourselves and so we can at least get the money for the down payment, but we are just confused where to start the home loan process with the daughter’s house. We have never bought a house the normal way…our double wide was sold to us FSBO with a Warranty Deed. Help, we don’t even know where to start, and sure don’t want to miss out on the great deal the son-in-law wants to gives us on this house.
    Lanie

    1. Hi Lanie:

      We can definitely help you look into your options and walk you through getting started with the loan process. Someone will be reaching out.

      Thanks,
      Kevin Graham

  91. Good Evening,

    I have an opportunity to purchase a property from a close friend off market. Will that effect my ability to get conventionally financed? Does the property need to be listed to get a conventional loan?

    Thanks in advance

    -Sean

    1. Hi Sean:

      The property doesn’t have to be listed to get a conventional loan. However, there are certain guidelines you may have to follow with it being a non-arm’s length transaction. I’m going to have someone reach out to you about this.

      Thanks,
      Kevin Graham

  92. My uncle has a vacant home in TX that needs $5k-$10k in updates to make it rentable. He currently has a loan for $28k on it, and his monthly payment with taxes and ins are $450. I would like to buy it, rehab it, and rent it out for an investment property. My problems are this:

    1. I have bad credit. 580 credit score, terrible debt to income ratio. Working on paying down credit cards now.
    2. We have a mortgage on our home now. We only have about $20k in equity.
    3. I am now self employed. We started a business last year that has taken off. It is paying the bills, and is profitable. But, I have no real way of showing income.

    So, I am assuming I will need a loan to buy this property, and a rehab loan at that for about $40k – $50k. He also has offered to just have me take over the payments, then I could figure out how to rehab the home over time. Is it possible to legally have myself take over payments and not have any issues if something happens, like a death?

    1. Hi Jon:

      Congratulations on the profitable business and it sounds like you’re doing what’s necessary to get your credit in shape. I’m going to have someone reach out to you about both what you can do to eventually qualify and also what happens if you just start making the payments. Thanks!

      Kevin Graham

  93. For the last 20 years I have been living in my parent’s 2nd home..(investment property) I guess you call it… I have been paying the mortgage on it though the mortgage is in their name…value of house is about 420,000 and 178,000 left on loan. Am I able to buy this house at the 178,000 from them ?? Or and plus…Can I be put on the deed…..added to the mortgage….quitclaim deed….grant deed….tax problems arising from any of these….will mortgage company call the loan due ?? I am trying to get this house in my name so I don’t have any problems down the line..sadly when they pass..I cannot qualify for a loan for the 420,000 amount but I can for the 178,000…The house is currently in a trust…Do I wait till their passing and get it from the trust ?? And would the mortgage automatically go to me without qualifying for the loan…sounds morbid to talk about this kinda of thing but want to know what to do in advance…

    1. Hi David:

      There’s nothing wrong with advance planning. Your question is a bit complicated to try to answer here, but I’m going to have someone reach out and help you go over this. They’ll be in contact.

      Kevin Graham

  94. My Aunt inherited a house that she no longer wants to manage. It is completely paid off and has no liens or mortgages on it. She doesn’t want to deal with the hassle of managing the property as she is out of state, so she is wishes to sell it to me at discount to keep it in the family (I don’t plan to sell it anytime soon). I’d like to draw up an agreement that has me pay her a down-payment in exchange for a quit-claim deal followed by monthly payments over a fixed period of time. Would this be the best option to avoid transaction costs and taxes?

    Thanks,
    Paul

    1. Hi Paul:

      The tax part of these questions might be best left to a tax adviser. One of our team members that deals with titles might be better able to advise you on transaction costs in this situation than I can. They’ll be reaching out.

      Thanks,
      Kevin Graham

  95. Hello
    My mom has a house that my sister lived in and paid partial mortgage whir my mom paid the rest. My sister paid it past the grace period every month for about a yr. my husband and I moved in in October. The house was almost foreclosed on because of the way my sister was paying. My parents live out of state and weren’t on top of things unfortunately. Before we moved in my mom got the payments paid and up to date and we paid starting December until now. She now wants to sell us the house. What is the best way to go about this?

    1. Hi Drea:

      I’m going to have someone reach out to help you go over your options. They’ll be in touch.

      Thanks,
      Kevin Graham

  96. We are currently renting my father in laws home; however, he will be moving in with us soon. We would like to buy the house and he would like to sell it to us.
    He currently has about $400k in equity. He will probably live with us until he passes away or at least he won’t be buying another home.
    How would we go about this?

    We have been in this house and honestly it is perfect for us so we want to buy and he wants to sell, he’s not looking to make money off of it. Our fear is that he will pass away and we won’t have anything to protect us in the home (we are making payments to him not the bank). We fear my sister in law would come in and want half of the equity. We get along fine and she is getting a nice chunk of change too so this isn’t really about that we just want to make sure we are protected into staying in the home and not be forced to sell if she wants the equity.

    What kind of loan would this be? What is the best way to go about it? Oh and we are first time home buyers.

    Thank you!

    1. Hi Jessica:

      You may have a few options and your father-in-law can gift his equity to you. If the house becomes yours, you don’t have to worry about your sister-in-law. I’m going to have someone reach out to you about this.

      Thanks,
      Kevin

  97. Hi,
    My husband and I have been living in a home that my in laws own for the last 5 years. We have been on title for two and have been paying the full mortgage. We are now buying the home from them. Can we turn around and sell the home and not pay capital gains tax since we have been on title and there is proof we pay mortgage? Or do we have two live there 2 years after purchase to avoid capital gain tax? Any info would be appreciated. Thanks!

    1. Hi Missy:

      I’m not sure of the answer to this. I’m going to get this to one of our Home Loan Experts to see if they have any thoughts, but especially with state taxes, these things may vary. I would talk to a local tax adviser for definitive advice.

      Thanks,
      Kevin Graham

  98. We are renting the house that belonged to my husband’s grandmother. (I will refer to her as Toots, from here on out.) The property is technically 2 separate lots. The house is on lot 1. There is a small building that is adjacent to the home. I will refer to this lot as lot 2. Toots ran a beauty parlor out of the building. It is only accessible from the house’s driveway, with a walkway connecting the two. Toots was unexpectedly and suddenly struck with dementia.

    During the early days, in a moment of lucidity, she put the house in her son’s name. (My father-in-law who I will refer to as Ron ) The beauty parlor is still in Toots’ name. It is only used for storage now. Apparently, lot 2 includes part of our carport and about a foot into our kitchen.

    Toots is now in a nursing home. I was told that lot 2 can’t be sold because Medicare has a type of lien against it, but plan to release it after Toot’s death. Ron say’s he can’t sell either lot until this is resolved. I have not confirmed any of this, but since Ron is family, I haven’t pressed the matter.
    We plan to buy both lots, since they are used as one property.

    The house was built in the 50’s and is in dire need of updating.We love the bones of the house. The location is perfect for our family. One bathroom was an add-on and the workmanship is shoddy at best. It needs to be torn out and redone. The plumbing is so bad, we have closed it off and don’t use it. The main bathroom is in better condition, but has a tub with no shower. The plumbing to the sink is in need of repair. Water won’t drain and some dirt like gritty substance will back up into the sink. Clog remover will remedy the problem short term, but the first rain will stop it up.

    We want to do renovations on the house, but don’t want to shoot ourselves in the foot by increasing the market value of the house, we intend to buy.

    We have already lived here for 3 years. Rent is really low, so we don’t want to force Ron to make repairs. How can we renovate our house now, and still protect ourselves from overpaying later. Is there some way we can get an appraisal now, and have our buying price locked in? …Or at least hold Ron to the original appraisal in relation to the real estate market at the time we buy?

    1. Hi Brandy:

      Sorry to hear about Toots. Given that you don’t currently own the property and the issue of the lien, a refinance may be difficult to work out. You may want to go with a personal loan. We do have a sister company Racket Loan that could help you out with that, but I’m going to have someone reach out to look into all your possible options. They’ll be in contact.

      Thanks,
      Kevin Graham

  99. We are trying to gather information and any help I could get would be appreciated. My husband and I recently sold our house (which was in a different city) in September of 2015 and moved into my mother’s house where she is currently still living. We have talked about buying the house from her, she paid it off long ago and now only pays taxes and insurance. The house however is old and would need some major remodeling/repairs done. We have paid off most of our debt from the our home sale and have money saved to help with a down payment. Would we need 2 different loans; one for the house purchase and one for the remodeling? Or would we just have an agreement that we would pay her monthly until the house is paid off and have only one loan for the house remodeling? She has said that she would sell it to us at a discounted rate. I want to be sure we’re doing everything the right way to avoid any legal/irs issues.I also want to be able to make the changes my husband and I want without my mother feeling her say needs to be considered because her name is on the title. Again, any helps is appreciated, thank you!

    1. Hi Leslie:

      It may not be possible to do two separate loans because with a mortgage, you generally need to wait a certain amount of time before you can take cash out. I’m going to have someone reach out to you about the best way to handle this, but two of your options might be to either have your mother do a cash-out refinance and pay her until the loan is paid off or to take out a personal loan. Someone will be in touch.

      Kevin Graham

  100. My wife and I would like to buy my wife’s aunt’s house. The house is paid off and so there is no mortgage , the taxes are also paid off for the year. I have the money to pay what she wants for the house . Do we just pay and sign the deed?

  101. My wife and I would like to purchase my mother in laws home. It is on several acres of land and has appreciated significantly since they originally built there 20 years ago. The property is worth around $700K. We would like to give her 10% down to use to build a mother in addition on to the home. She currently still owes about $100K on the mortgage. It is much more than we can afford but she would sell it to us at a reduced rate since she would get to live there for free throughout her retirement. Could we owner finance through her or would it make more sense to seek traditional financing? I think the ideal situation would be for her hold the note so she doesn’t have to pay the capital gains tax from a lump sum sell. We would also need to get creative on some sort of 5 year arm where I could either just takeover her current mortgage payment or have some sort of period where I could pay a reduced amount before taking on the full mortgage payment. The idea would be to clean up some student loan debt before taking on more.

    1. Hi Tyler:

      I’m going to get this to a Home Loan Expert who can best answer your questions on this situation. They’ll be reaching out.

      Thanks,
      Kevin Graham

  102. My husband and I were working with a realtor and found a property, the only way they were willing to accept our offer was if we could close within 45 days. We applied for a mortgage and were told we did not qualify but the week of close were told that underwriting had approved us! We were going to close as co-purchasers with my father but he decided to just have the house in his name so we wouldn’t have to wait 6 months to refinance. He purchased the house in cash.
    We are wanting to move forward with the purchase now between my father and my husband and I. We have been in the home 4 months. Originally he planned to give us the 20% down. Now I’ve heard be can give us a gift of equity. He was going to make the selling price the same as what he purchased for and do 20% gift of equity. We do not want to have PMI. Can this work since it is now a transaction with family?
    There was not an appraisal done prior to his purchase but we know it was purchased below appraised value.

    1. Hi Victoria:

      I’m going to pass this to a Home Loan Expert who can better go over the options for your particular situation. They’ll be reaching out. Have a great day!

      Thanks,
      Kevin Graham

  103. Recently my Grandmother passed away and now my Grandfather wants to sell his house to me. Immediate family is on board with the idea, however I am not sure if I can afford the house at its appraised price. No one in my family seems to be concerned about the idea of me paying possibly less then the appraised value, but I have been reading a lot about tax hits, or possible penalties if I pay 20-40% below appraised value. I am trying to avoid that from happening and hopefully being able to do this as smooth as possible.

    1. Hi Jeff:

      You can work something out where you pay less than the appraised price for sure. In certain instances, there can be implications for the down payment, but I’m going to have someone reach out to you to go over the details. As far as the tax implications, you may be better off talking to an accountant.

      Thanks,
      Kevin Graham

  104. My ex wife is still in the marital home, I left in 2008 shortly after purchase, in 2010 I attempted to convince her to let me sell the house an d split the difference, she refused. I couldn’t afford to pay the mortgage there and live in my house that I’m renting now. In order to sell the house to her she wants me to sign papers and give up my financial info to the loan company, which to me sounds like a refinance, seeings how I don’t have the money to put a down payment for a refinance is there another way to allow the transfer to go through. Keep in mind child support is her primary income and even though she does work I make considerably more than her, and I’m not sure about her credit.

    1. Hi Shawn:

      I’m going to have someone reach out and look into your situation and give you better advice than I can. It does sound like she’s trying to refinance.

      Thanks,
      Kevin Graham

  105. My grandmother recently passed away and her home has been completely paid off for years. Under her will, the home was tranferred to my mother and uncle’s names. They want me to buy the house from them. How do I go about it? They said I could pay them rent each month until the 175,000 they’d want for it was paid off. Do I have to wait until I pay the full amount for them to sign the deed over to me or can they sign it over to me now and then I make payments as normal? They dont want me to have to take a mortgage with the bank and i would prefer not to do that either. We are very close and live in the same neighborhood, there would be no issue with fighting over money or backing out, they even offered to pay some remodeling costs as they want to keep the house in our family and not sell to strangers. We are in Illinois.

    1. Hi Lara:

      They can sign the property over to you whenever they wish. There’s no requirement to wait. As long as they agree to it, they can do whatever they want with the title.

      Thanks,
      Kevin Graham

  106. My wife and I would like to pay off my parents house (11,000) and THEY WANT to deed the house to us. Then, put a manufactured home on the 1.5 acres next us (which I own). We are going to pay for everything so they are debt free and have a handicap accessible home to live in that is easy to maintain that is close to us so we can take care of them. Their home is worth between 175k and 210k. The manufactured home they want is around 100K (foundation, septic, well included). What are our best options for this situation? Thank you!

    1. Hi Ryan:

      Unfortunately, we don’t do loans on manufactured homes. Your questions would be best directed at a lender that offers this option.

      Thanks,
      Kevin Graham

  107. My father’s company builds homes. We would like to purchase one of the homes he built. What are my limitations making this purchase via an FHA loan?

    Thanks for your assistance,

    Tyler

    1. Hi Tyler:

      I’m going to get this to a Home Loan Expert to give you further details, but there’s definitely some inspection requirements since this is new construction. There is also the possibility of a higher down payment because you’re buying from a family member. Someone will be reaching out to go over this.

      Thanks,
      Kevin Graham

  108. Hi, I want to buy my brother’s house that I’m currently living in. The house do have a active mortgage and need lots of repairs to make it comfortable . What’s the best way to purchase the house?

    1. Hi Nikki:

      In a lot of ways, you can treat it like a regular sale. You can negotiate the price with your brother and get him to lower it to account for the repairs that need to be done. Depending on the type of loan you get, you may have to make a higher down payment because it’s a sale within the family, but I’m going to have someone reach out to you to go over those details and your options.

      Thanks,
      Kevin Graham

  109. My husband and I want to buy the home we are currently living in (and have been for some years now) from my parents. Is there a simple way to do this without paying a bunch of fees?

    1. Hi Sarah:

      While there are special guidelines for non-arm’s-length transactions, in most cases, it’s going to proceed like a regular sale. If you have certain types of loans, you may have to come up with a higher down payment, but I’m going to have someone reach out to look into your situation and determine the best way to go about this for you.

      Thanks,
      Kevin Graham

        1. Hi Deanna:

          I’d be happy to have someone reach out and look into this with you. They’ll be in touch.

          Thanks,
          Kevin Graham

  110. My husband and I are getting divorced. He is willing to let me keep the home if I get a mortgage for what is owed on the house in my own name. I am not on the current mortgage or deed. It is also a VA loan through USAA. What steps do I have to take to be able to do this? Would this be considered a refinance or what? Where do I start?

    1. Hi Nichole:

      You could refinance or possibly assume the mortgage from your husband under its current terms. I’m going to have someone reach out to go over this in more detail with you. They’ll be in touch.

      Thanks,
      Kevin Graham

  111. Hi , my situation it’s that in 2007 my husband and I bought this house in about 350 , then in 2008 my husband got sick with cancer , then the real state market drop off , and our house value change as our personal an financial situation too, our monthly payments were so high and with this terrible disease become worst. So our bank refused to help with a loan modification , and we decided to do a short sale to solve the problem, his mother help us , she bought the house for us , I did not agree but my husband was in terminal phase , so I did not have choice, we closed the short sale contract and never moved from our house , but now the house loan and al papers are in my mother in law name, but few moths later of finished with short sale my husband past , ( 2010) then everything change wit his family , now they want to keep the house and evict me , I been paying the monthly payments until a year ago , I’m still living here with my children , what I can do ? We paid de down payment of 30, 000 , she didn’t paid nothing ,

    1. Hi Bertha:

      Sorry to hear about your husband and your family situation. Since she owns the house and is on the title, I’m not sure if there’s anything you can do. I’m going to pass this along to one of our Home Loan Experts to get a second set of eyes on this and see if they have any options for you.

      Thanks,
      Kevin Graham

  112. My daughter wants to sell her home to her brother. He does not have a down payment so she wants to gift him the money she would have to pay a realtor as the down payment. I did this for her when I sold her my aunt’s home. Can she do this

    1. Hi Joanne:

      This may be an option. Depending upon the type of loan, the down payment may need to be higher because it’s a non-arms length transaction. Another way you can do this would be through a gift of equity. I’m going to have someone reach out to you and see if we can get more information to give your daughter the best advice possible.

      Thanks,
      Kevin Graham

  113. My brother and I found a large home for both our families to live in together to split the bills. But the home was put in my brothers name only. We purchased the house for a great price but now the market has gone up. 6 year later, my brother and his family want to split but my family wants to stay. He moved out 1 year ago and we took over payments. A year ago we tried to get the house in our name but the lender said we were late on our monthly mortgage payments, she needs 12 consecutive on time payments. It’s now been a year, all on time. We are ready to try this again but I don’t know where to start! Can you point me in the right direction as to where I need to start with first?

    We owe $115K for the house now, it is now worth $195K. We agreed that my brother would get $12K when we put the house in our name. If we owe $115K and give him $12K, will there be an issue with this? Can I also take $12K for us to make renovations to the home?

    We live in a HOA and owe them $$$, will this affect us at all?

    Do we need to be prepared and have a down payment for buying the home or is there any way around this? We can get the down payment if necessary, credit is great, very little debt and we have stable jobs.

    I am nervous to start this process again due to the stress of it all. I would really appreciate any guidance anyone can provide me. I’d like to be more knowledgeable about this process, rather than going into this blind.

    1. Hi Amber:

      First, there’s no reason to be nervous at all. We can help walk you through this process. I’m going to get your question to one of our Home Loan Experts who can help take this point by point.

      Thanks,
      Kevin Graham

  114. So I have bought my grandfathers place back in August 2013 and he forgot to mention to me that he rented a water heater from National now know as (Reliance Home Comfort) and I have never recieved any mail or any calls from anyone concerning this matter. However just the other day (Feb 22 2016) I finally received a bill from Reliance stating that I owe them $220 dating back from May 1 2015 to April 1 2016 for having this in my home. Now you may wonder about who was paying for it all that time? No one was becasue my grandfather had cancel’d the bank account the money would have been coming from as it was the same account for all his bills (Electrical, gas etc). So i’m wondering what I should be doing about this as I have no contract with this company and no one was paying them since 2013? Am I obligated to pay this bill or anything to this company? They also spelt my name wrong on the Bill which I doubt really means anything.

    Please help as I do not want to rent this water heater from them as I would rather own one myself.

    Thanks,
    Jeremy

    1. Hi Jeremy:

      Unfortunately, I’m not familiar with Canadian law in this area. I would call the company and notify them that your grandfather no longer lives there for starters. Then I would contact a financial adviser and find out what sort of responsibilities you have.

      Thanks,
      Kevin Graham

  115. Patrick Chism.
    I see you help alot of people here , can you answer this question for me because I have been asking but no one seems to know the facts.
    if my stepson have a property and paying his mortgage ok I’m over 62 years old can I buy his property from him by cash ?
    I’m looking forward hearing from you.

    Bless.
    RP.

    1. Hi Roy:

      I work on Patrick’s team at Quicken Loans®. You can definitely buy the property away from him for cash if he agrees to it. You can even buy the property with a mortgage, but the down payment may need to be higher in certain cases.

      Thanks,
      Kevin Graham

  116. My dad has agreed to sell his house to my wife and I. We moved in to the house about 8 months ago and have been making the mortgage payment for him. He moved out when we moved in. I’m ready to move forward with getting a mortgage for the house in my name. He is selling us the house for about $100k and its worth around $130k. Will it be difficult for my wife and I to get a mortgage on the house since I’m buying it from my dad?

    1. Hi Ryan:

      You can get a mortgage on a home you buy from your dad. Because it’s a transaction between family members, additional documentation may be required as far as your mortgage history and depending on the loan you get, the down payment involved may have to be higher. However, it doesn’t work that way for all types of loans. I’m going to have one of our Home Loan Experts reach out to you with more information.

      Thanks,
      Kevin Graham

    1. Hey Kevin:

      Purchase is definitely an option with reverse mortgages. I’ll have someone reach out.

      Thanks,
      Kevin Graham

  117. My wife inherited her mother’s home about 3 years ago when she passed away. We paid off the mortgage and now my son and his family lives in it rent free (for about 2 years). We are wanting to sell the house and they are interested in buying it.
    The house appraised for about $70,000 (it needs some work) and told them it would be a “sell as is” purchase. We would be willing to sell for less than market value if this would help them secure a loan. We are not fixed on the $70,000. We are more interested in helping them in buying a house.
    They have little or no down payment, but could make monthly payments. We would consider lowering the price of the house, so they may qualify and have some income to fix it up.
    Some questions to ponder:
    1- Do we need a real estate person to help with the transaction? Don’t want to pay a real estate commission, if we don’t need one.
    2- Would lowering the price of the house help with a down payment?
    3- Would we need to hire a real estate lawyer, for paper work?
    4- Where is the best place to begin searching for a loan (person/family with little or no credit)?
    Bottom line is- we have a great relationship with my son and his family and we want to keep it that way.

    1. Hi Carl:

      I’m going to take the simple questions first. There’s no requirement that anyone hires a real estate agent. You can sell the house yourself. If it’s standard paperwork, I can’t imagine you would need a real estate lawyer, but I suppose it depends on your/your son’s level of comfort with the process. The part that concerns me is that you say he has little or no credit. You’ll be hard-pressed to find anyone who will approve a loan without an established credit history. That said, I can get you to a Home Loan Expert who might be able to get you some advice.

      Thanks,
      Kevin Graham

  118. I have reached a settlement agreement on a current market valuation with my construction loan lender. They are OK with the funds coming from my sister-in-law who lives with us. The trouble has been finding a lender for her due to arm’s-length worries. Why does this seem to be such a big deal? (The price has been independently set at market value and all relationships are exposed)
    My down payment and some of the construction loan amount are both lost due to the lost equity in the project. The bank says they can’t use Harp because it was a construction loan and not a conventional mortgage. It couldn’t convert to a conventional mortgage due to the market downturn and loss of equity.
    Why would we both have to lose more in an arm’s length foreclosure process?

    1. Hi Confused:

      Unfortunately, I’m not sure how much credible information we could give you because we don’t do loans on new construction. My best advice would be to pose those questions to lenders that offer new construction products.

      Thanks,
      Kevin Graham

  119. Hello,

    My grandfather is in a nursing home and my mom and aunt have the title of his house. We plan on moving in this summer and renting then purchasing whenever he passes away. The house is worth around 150000 but my family members are willing to sell it to us for 100000. Is this possible if the selling price is lower then the accessed price? We would like to start renovations right away which would up the market value. Thanks!

    1. Hi Lauren:

      You can absolutely buy the home for less than the assessed value, but there may be certain restrictions depending on what type of loan you get. Also, if you want to take cash out to do the renovations, you’ll have to wait a while before you can do that. I’m going to have a Home Loan Expert reach out to you with more information.

      Thanks,
      Kevin Graham

      1. Hi,

        I am also in a similar situation as Lauren. I’m currently renting a house from a family member. After our 1 year lease is up we want to purchase the home at an agreement for less than the assessed value. However, it needs a new bathroom sink and whole new AC unit. Also, we would like to start renovations.
        Thanks in advance!

        1. Hi Jessica:

          The purchase isn’t a problem assuming everything is in order. However, if you want to start renovations, you might have to wait a while depending on the loan type in order to take cash out. I’m going to have a Home Loan Expert reach out to you with more information.

          Thanks,
          Kevin Graham

  120. My uncle owns my grandmother’s home, which is paid off. He is willing to sell it to me for way below market value (worth almost 400,000, selling to me for 200,000).
    1) Is it best for him to just sign it over to me and find loan money somewhere other than a mortgage loan…or is this not even an option?
    2) Can I pull “equity” out to fix it up and use some $ for a down payment on 2nd home?
    My ultimate goal would be to fix it up, rent it out, and purchase a 2nd home for me to live in. I will also be a first time home buyer.

    1. Hi Melissa:

      Since he owns it free and clear, it would be an option for him to just sign it over to you and you could try to find the money to pay him the $200,000 through some loan other than a mortgage, I suppose. I’m not sure there would be any advantage to that though because if you’re looking to pay for the house anyway a mortgage would probably be simpler than a couple of separate transactions.

      As to your second question, once you own the property you can absolutely pull cash out based on its value, but there’s generally a certain amount of time you have to be living in the house if there’s a mortgage in order to do that. It would also require a conversion from a primary property to an investment property via refinance since you’re looking to rent it out. I’m going to pass your question along to one of our Home Loan Experts to give you some more in-depth advice.

      Thanks,
      Kevin Graham

  121. Hello, I’m trying to buy my father’s house it’s assessed at 225k he wants around 160k but it still has cess pool leach field system that is in perfect working order is there any way to get around doing a title 5? I will need to take out a mortgage to purchase the home

    1. Hi Jason:

      I’m not that familiar with regulations around septic and similar systems. I’m going to put you in touch with someone who can help get more information around your situation and help figure out when you might need to do.

      Thanks,
      Kevin Graham

  122. House is listed for $169,000- 253 DOM, reduced from $200,000. Grandmother owns house, grandson wants to purchase it for $178,000 with a gift equity fromGramma for $29,000 and closing cost of $4400. Since it has been on the market for 8+ months and list price and sales price are within 5% is this considered an arms length or non arms length transaction. Thanks

    1. Hi Susan:

      Purchase price and LTV really doesn’t have anything to do with it. Since there’s a direct relationship between the grandson and his grandmother, it’s considered a non-arm’s length transaction. That doesn’t necessarily mean it won’t be allowed. It just means there may be a limit on the amount of financing the grandson can get. Hope this helps!

      Thanks,
      Kevin Graham

  123. Hello,

    The house next door just went into foreclosure and my mother in law would like to move in and purchase ($60K) it but she will not be ready to purchase it for about a year. I am willing to purchase this and make the payments until she is ready. So the question is what is the best way to this? Is there a way to purchase this together while I will make the payments for about a year and then when she is ready she can pay me back and assume the loan?

    Thank you

    1. Hi Bill:

      Assumption may certainly be an option for you and your mother-in-law. I’m going to have a Home Loan Expert reach out to you to work in your personal situation.

      Thanks,
      Kevin Graham

  124. My husband’s mom is wanting to sell us her house under market value. Like 50k under. I’m wondering if she’ll be taxed the difference or anything like that

    1. Hi Ashley:

      My gut says she would only be taxed on what she sold it for, but I would consult with a tax adviser on all tax questions just to be sure.

      Thanks,
      Kevin Graham

  125. I own a house.It’s worth $ 925000.My outstanding mortgage is $550000. I want to sell 25 % of the house to my son? Can my son get a mortgage for the 25% and pay me?

    1. Sam:

      You cannot get a mortgage for a sale involving partial equity. If you wanted your son to have a legal claim to the mortgage, it may be possible to refinance the loan and add him as a co-borrower. Hope this helps!

      Thanks,
      Kevin Graham

  126. Hi there. My husband, kids and I live in a home that is owned by my mother. We had a verbal agreement when we moved in, that we are buying to own someday. We have made almost all the payments, with exception of maybe 3 or 4 when we had hardship. Is there a way to either do a loan assumption, or re-finance and put us on the mortgage, and drop her? I really do not want to have to buy my own house from her at a much higher price. The market value of the house has gone back up to about 80k above what we owe. She is saying she will sell it to us “somewhere in between” market value and amount owed. But then our payment will go up, and she will get all the proceeds from the sale. What are my options?

    1. Hey Steph:

      Since your mother owns the house, she has to agree in order for you to assume the mortgage or make any kind of refinancing decision. I really wish I could give you better news than that. My best advice would be to talk to your mother and hope you can come to some sort of agreement. I wish you luck.

      Thanks,
      Kevin Graham

  127. Hello. My mothers fiancee is letting me live in thier paid off house. Its older and the market value is appx. 50-60k. I am thinking about buying it. They are wanting around 20-25k for it. I was wondering how would i go about getting the extra for renovations and bringing it up to date? I would be a 1st time home buyer. And then, where do i start for renovations? Thanks!

    1. Hi Cynthia:

      It’s hard to get a mortgage for under $30,000. My advice would be to try personal loans for the initial purchase. At some point after the purchase, you could do a cash-out refinance and get a mortgage to pay for the renovations you want.

      Thanks,
      Kevin Graham

  128. Hi,
    My husband and his sister own a house together outright with no mortgage. My husband and I would like to buy his sisters half of the house.

    Can we get a mortgage/remortgage without a deposit as my husband already owns half of the house?

    Can we take out more to renovate the property?

    How long should it take to go through as we would like to move into the property start of April.

    Kind regards
    Tracy

    1. Hi Tracy:

      There are several questions here. I’ll help you with what I can and get you to a Home Loan Expert who can reach out and answer the rest. There’s usually a deposit involved any time you get a mortgage to cover things like the appraisal. We have to know what the house is worth before we can give you the money. I can’t tell you exactly how long it would take to close the loan because every situation is different, but we pride ourselves on being very efficient. I’m going to leave it to the Home Loan Expert to let you know whether you can take cash out during the refinance.

      Thanks,
      Kevin Graham

    1. Hi Marquita:

      If your family and your husband’s parents are both living in the house at the same time, you cannot buy the property from them.In certain cases, the down payment necessary may be higher. Our Client Relations team is off today, but I’m going to have someone reach out to you to give you more information this weekend. Happy New Year!

      Thanks,
      Kevin Graham

  129. My husband and I recently moved into a home about almost a year ago that was my son’s home as he grew up its perfect size for our family of 5 and we really would like to try it on the home being that is owned by my husband’s parents I was wondering what we will have to do in order to try and get the loan out from underneath them and on the home or so

  130. I and my 3 siblings are beneficiaries of a trust that holds a summer cottage. I am considering asking my siblings to buy out my share of the cottage because I no longer wish to use it. I am going to have it appraised but have been told by several experts (realtors, attorneys, etc.) that because this is essentially a non-arms-length sale, and the fact that no realty fees will be incurred, it is a generally accepted practice that the appraisal be reduced by 6% in consideration of no realty fees because if and when they sell it in an arm’s-length say they will incur realty fees while I did not. Any opinion?

  131. Hello! If you could give me any guidance I would greatly appreciate it. Here is the backstory.
    1. I found a house for a great price, but I couldn’t get a mortgage for it due to the condition (it’s a fixer upper)
    2. My father stepped in and bought the house in cash for 140k (in his name with the intent to sell to me once the major issues were fixed)
    3. Over the past 6 months we have been working on it, and have put ~10k (material) into refurbishing the house and fixing the major issues.
    4. I now want to buy it from him for the agreed upon (150k), but it was just appraised at 220k…
    5. If he sells it to me for 150k will 70k be considered a gift? And will I be liable for taxes on that 70k?

    other important info
    Once the sale is final I don’t plan on selling the house any time in the near future (maybe 5-10 years from now?)
    My father is sick, and he is scared that he will be put in a nursing home, if that happens he’s afraid that the nursing home would come after me and the house, especially if this “gift” is really a gift….the last thing I want to do is put more stress on him, but right now he is freaking out about potentially causing me money issues down the road….

    Any help would be greatly appreciated, thank you!

    1. Good morning! In most cases, your father will be able to sell the home for any price he wants. He doesn’t have to sell it for the appraised value. That being said, when the home is being sold from a relative, there are often some LTV considerations. I’m going to have home loan expert reach out to you with an email to talk more about this.

  132. My parent had offered ous a house a rent to own paying monthly until we’re done paying them but we’re almost done paying off what we need to do to own the house our name claim tax …

    1. Thanks for your comment, Guadalupe. A home loan expert will be reaching out to get more information about your situation. Thanks and have a good one!

  133. Hi,
    We are considering asking my father to purchase our too-small house from us and then putting the house in some sort of trust (he’s 74), so that upon his death, the house could be deeded in our names / our children’s names. Our house is valued at 205,000 and we owe 100,000. He lives 3,000 miles away and this would not be his primary residence. His purchase at fair market value would allow us to keep the house to use as a rental property and then have $ for downpayment on a bigger house that we need with 2 kiddos. A): is this possible, and B): what kind of taxes (capital gains/gift tax) are to be paid after transaction? Could I manage the rental property for him, taking a wage for property manager, thus giving him a return on his initial investment?

    1. Good morning, Jen. I’m going to have a home loan expert reach out to you to discuss your situation further. There are many variables included in this situation, so in order to give you the best possible answer, we’d like to ask a few more questions before giving any advice. Thanks for your question!

  134. Hello, My husband and I are considering buying my mother in laws home that we have currently been renting since 2010. Part of their initial agreement before i ever came around was a lease to buy, so all of our rental payments were suppose to go toward the purchase of the house. Now that i am in the mix, i am being told my mother in law that should would like to sell us the house for 400,000. When i look up the current value of the home I’m finding it maybe only worth about 290,000. I really don’t believe it is fare to ask more than the house is worth. what would you suggest in this situation?

    1. Happy Monday, Stephanie. You said that the initial agreement was a lease-to-own situation; do you have any documentation to support that? That would certainly be helpful going forward. As for the value, it all comes down to the appraisal. Your mother-in-law may believe that the house is one price, but an appraiser is actually the one to make that decision. Check out this article about appraisals. Sure, the seller can still list the house at an inflated value, but a mortgage company won’t be able to finance you for any more than the appraised value. In other words, if the house is listed for $400,000 and it’s only worth $290,000, you’ll need to come up with $110,000 of your own funds…which is crazy. It also means that you (probably) won’t be able to sell it for that inflated amount if/when you and your husband move.

      I suggest that you open the lines of communication. You and your husband should have a talk with your mother-in-law, during which you discuss the previous least-to-own agreement, as well as the appraisal. This may seem awkward or uncomfortable, but a sit-down conversation will likely help all of you in the long run.

      If you have any more questions about this, or if you’re looking for financing, reach out to Emma, one of our amazing home loan experts. You can email her at Emma@quickenloans.com.

      Have a nice week!

  135. I was tring to go through a lender to buy my fathers house and at first I was only required to put 5% for the down payment. When they found out it was my father selling me the house they are now requiring I put down 15%. Why is that?

    1. Good morning, Matt. Since you’re buying a home from a relative, it’s going to be considered a non-arms length transaction, which changes the requirement of your loan. Depending on a variety variables – such as your Loan-to-Value ratio, your credit score, the amount of your down payment, etc. – you may be expected to put down a larger down payment. I’m going to have some of our top-notch home loan experts reach out to you to get some more details. They’ll be able to point you in the right direction. Have a nice weekend, Matt.

  136. I am looking to buy my parents home that is paid off. They would like to sell it to me below market value and I am also a first time buyer. Where do we begin?

    1. Good morning, Allan! You should begin by speaking with a home loan expert. I’m going to have one shoot you an email to get some more details about your situation. Have a good day and congrats! This is a big step in your life. Enjoy it!

  137. My brother an I have owned a house together in California for many years. Now he wants me to buy him out. The problem is that the house is assessed from many years ago. Is there a way to buy him out without my property tax going up?

    1. Hello, Matthew. I’m going to have a home loan expert send you an email about your situation. They’ll be able to get you on the right track. Have a good morning!

  138. My wife and i and our 4 children have lived and rented my mothers house for tge last four years it has always been a plan for my wife and i to purchase this house we have paid my mother mortgage in full the hole time an i have been working on my credit to be at a point were we are able to get a mortgage loan of our own i have started to speek to a broker about it an i am trying to find out what would be best in my situation as far as down payments an other things

    1. Good morning, Sam. In order to better help you and your wife, I’m going to have a home loan expert send you an email to get more details. They’ll help point you in the right direction!

  139. Hi,
    I would like to buy my grandmothers house. The house is paid off years ago, and she would still live with me in the house once I buy it, so we (the family) have sat, spoken and agreed that it would be sold for a good/cheap price if my grandmother still lives with me rent-free.
    I have done some research, etc…. and just want to make sure I am not commiting gift-tax fraud, or any other type of thing like that.
    Please assist or point me in the direction of someone who can help and/or assist me with all of this.

  140. My girlfriend and I are purchasing a home from her grandfather, we need help finding how to do this legally so we don’t get hit with a gift tax since we are paying the fair market value. Thanks!

    1. Hi, Dave! Thanks for reaching out to us. We’ve passed your comment on to our home loan experts who will reach out shortly to discuss your situation.

  141. My sister & brother in law built us a house & the plan is for us just to buy it from them once it’s complete. They paid for the build out of their own money & we are going to pay them back what they used by buying the house from them. Would there be anything in particular that could stop us from buying it from them? Any additional cost? Or can it just be a regular transaction between 2 parties? Thx!

    1. Hi Cyndy! I’ve passed your question on to out team of mortgage experts. They’ll reach out with more information for you.

  142. Hi. My grandma left her house in a family trust to my dad and uncle. It is paid off but my uncle wants to see his half to me. Do I need to be added to the family trust in order for the property taxes to stay the same? The house is currently assessed at about 10% of what it’s worth. I want to buy out my uncle but avoid the taxes going up. Is this possible?

    1. Hi Brandi! I’ve passed your question along to our home loan experts. They’ll reach out to you with more information.

  143. My husband and I financed the sale of a house we owned to a son (20 years, 4%). Since then (2009), interest rates have come down. Can we arbitrarily lower the interest rate or do we have to go through some legal process? A lawyer handled the original sale.

    1. Hi Pat! I’ve passed this on to our home loan experts who will reach out soon to discuss your options.

  144. My son purchased a house from me and my husband in 2009. We financed it (20-years), and he is paying 4% interest. Since then, interest rates have gone down. We want to lower his rate to 2 or 2.5%. Can we just arbitrarily do this, or do we have to go through some legal process? We did use a lawyer at the time of the sale.

  145. Hi! I would like to sell my condo to my ex-boyfriend/father of my child for the remainder of the existing mortgage. He has been living there and paying all expenses for the last five years. How do I go about this without legal implications?

    1. Hi Ashton! I’ve passed this one to our home loan experts. They’ll reach out shortly to discuss your situation.

  146. MY DAD WANTS TO SELL ME HIS HOUSE. HE PURCHASED IT THRU A VA LOAN. ITS ONLY BEEN A YEAR. HOW DO WE GO ABOUT THIS PROCESS?

    1. Hi Yashica! I’ve passed this on to our team of home loan experts. They’ll reach out and walk you through he process.

  147. Hi my name is Cheyenne and I have a question, I’m interested in buying a house and keep getting different information from people.. I recently was told when I go to buy a house I’m suppose to pay the yearly property taxes on it while in the process of purchasing it??? This does not make any sense to me can you please help me with this question. Because I thought you only pay the yearly taxes Once you’ve completely bought the House? Signed Confused

    1. Hi Cheyenne! I’ve passed this on to our home loan experts. They’ll reach out soon to discuss the process with you.

  148. My father in law and i decided to buy a house to flip. the deal was he puts up the money, I do the work and we split the profit. so the house is finished and my wife and I have decided to buy the house for ourselves. We need to buy it from my father in law. we agreed to take my cut out of the sale price. What is the best way to go about this?
    Thank you

    1. Hi Adam! I’ve sent your question over to our home loan experts who will reach out to discuss your options in more detail.

  149. I am selling my home to my son for what is owed about a 1/3 discount. This gift of equity has to be taxed? Is there no way around selling for the price I want?

    1. Hi Frederick! I’ve passed your comment on to our team of home loan experts who will reach out to you shortly.

  150. My husband and I purchased a home in 2004 with our son as the primary owner. Now we would like to have his name removed, do we need to purchase the home from him or is there another way to accomplish this?

    1. Hi Sherral! I’ve passed your comment on to our team of licensed mortgage experts who will reach out to discuss your specific situation.

  151. My fiance is buying his father’s house and we were told also that we have to put 15% down as well. However, I have been reading that if you live in the property for 6 months previous to signing the contract to purchase the house that the15% is avoidable. Am I correct? Or is their any way to avoid putting 15% down? Thanks!

    1. Hi Daisha! I’ve passed your comment on to our team of licensed mortgage experts. They’ll be able to give you a little more information.

  152. Hi! My aunt can’t afford her mortgage payments and she would like me to buy the house, but still have her live there. Is there a way I can do that legally?

    1. Hi Amy! I’ve passed your question on to our mortgage experts who will reach out to discuss your situation and see what options are available for you.

  153. I’m buying a home from my step dad and was told I would need 15% down because it be a non arms length transaction?

    1. Hi Carole! I’ve passed your comment on to our team of mortgage experts. They’ll be reaching out to you soon to discuss this situation.

  154. I’m wanting to buy my Grandmother’s 2nd home. The house has been empty for about a month. Is there any reason that would affect the down payment? We were told by one lender since it is not her primary home we needed to put 15% down instead of 3%. Just wondering if this is correct.

  155. I am attempting to purchase my mothers home for what is owed, which is about 1/3 of its value. I want to purchase it using an LLC describing the property as a rental. She would pay rent in the amount of the mortgage. Is this possible?

  156. Hi there,

    My wife and I are buying a home from her parents. (Their 2nd home)

    They have about 50% of their mortgage paid off.

    My wife and I make plenty of money to afford the payments but I don’t think that we will qualify for a good loan due to some credit issues so they have offered to finance it for us.

    How can we purchase the home and keep the mortgage in their name until we can get a good loan. I’ve read that if we are not careful the bank can forclose on them if they try to sell to us!

  157. I own 25% of the property already as part of the divorce agreement between my mother and father years ago. My mother wants to sell and my husband and I would like to use our 25% equity as a down payment. Is this possible?

    1. Hi Liz! Ideally, yes you should be able to but there are a lot of guidelines that may affect you actually being able to do that. Would you like to talk with one of our licensed mortgage bankers that can look into your specific situation?

  158. what is the best way to purchase a home that is fully paid off from your family member? i am trying to buy my parents 2nd house.

    1. Hi Donna! I’ve passed your comment on to our mortgage experts here at Quicken Loans®. They’ll reach out to you shortly.

  159. My uncle added me to his home with him as a joint with survivorship rights; the home is not encumbered in anyway. He said he did this so it would just transfer to me in the event some thing happened to him. Do I need to do anything to protect myself?

    1. Hi Anne! I’ve passed your comment on to our team of licensed mortgage experts who can give a little more clarity on your specific situation.

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