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What needs to be done in order to make a owner financed home like a normal mortgage?

I'm buying a home from my grandmother she is going to carry the title. I am looking to refinance as soon as the process goes through with the lawyer in order to make upgrades, but I'm not sure as to what needs to be done in order to make that possible. First home I have purchased so I'm going in blind.
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September 16 2013 - Sacramento
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i think the purchase loan option like Justin mentioned makes the most sense. she can even gift you equity for the down payment if needed.

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September 16 2013

Is she is the sole titled holder then you have no ownership in the property.  I think what you are intending is to buy from her and have her "carry back" the loan.   

As Barb mentioned if you plan to refinance as quick as possible, there are likely some other ways for you to structure things to forego the seller financing.    Keep in mind if you do go that direction, most loan programs require you hold title for 6 months before you would be eligible for cash out refinance.

Assuming you will be living in this property, and you can otherwise qualify based on your income and credit, and the property is in reasonable condition, then a good alternative to consider would be for you to apply for a purchase loan with your grandmother providing a gift of equity.

If she wants to get a certain amount of cash back from the sale to you, your purchase loan amount quite possibly can cover this amount, and then her existing loan would be paid off through the escrow on your transaction.

You should be sure to explore this type of option before taking an irreversible action that can set back your endgame plans of being the sole owner of an upgraded property.

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September 16 2013
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The upgrades would include adding about 200 square feet upgrading the kitchen and bathrooms Now by carrying the loan I mean being the bank. Financing me I guess it would be called seller financing. She owes 15,000 I would pay it off and then she would be the sole titled holder and I would make payments directly to her.
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September 16 2013
Please describe the upgrades you mentioned. It's hard to understand why you aren't just buying it from her directly now, rather than needing to refinance later. If she's giving you a gift of equity in the home, that still works. Plenty of people buy homes from family members. Also, when you say "carry the title," you mean the mortgage, correct?
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September 16 2013
 
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