Profile picture for Thesteelers

I want to buy my parents house at 400,000 We have 5% down. Whats the best financial way to do this

  • January 28 2010 - Wheaton
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (4)

Hi Thesteelers,

It really depends on your specific situation/needs.
Here are some of the things that may dictate how you go about this.

What county are you buying in? FHA has county loan limits so this will help determine if FHA is an option.

Are you eligible for a VA mortgage?

Are you eligible for a No Money Down USDA Loan?

Is the area considered a declining market? - If so, a conventional loan will require 10% down

Are your parents going to "gift" any equity to you? - with an FHA loan your parents can gift equity to cover the down payment required. With a conventional loan you will still be required to put at least 5% of your own money down.

What is your middle credit score? - You will need 700+ scored to get 95% financing on a conventional loan due to the Private Mortgage Insurance requirements.

What is your debt to income ratio? - a conventional loan will cap you at 41%.

As far as the actual sale is concerned, you can either have a real estate attorney or real estate agent help you fill out the sales contract for a nominal fee and a title company/title attorney will handle the rest.

Hope this helps.
  • January 29 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for wetdawgs
Be aware that purchase from relatives makes things more complicated, in addition makes you not eligible for the first time home buyer's credit (or the move up credit)
  • January 28 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Use a lender that you trust. 

Make a couple of calls to different lenders, banks or credit unions.

That way you can compare rates and fees.  You will need to get pproved for the purchase.  Your parents will need to utilize a title company to handle the transaction.  Chicago Title is a great one that I personally use.


I hope this helps!
  • January 28 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Call Jim Martin at [content removed by moderator] if you need a loan. He is a broker with Key mortgage. They are with Baird Warner. He will give you an honest view of what is needed.
  • January 28 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.