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I am trying to get a mortgage for a house I am buying from my parents. The bank is saying to use a Gift of Equity they want to see a Verification of Mortgage for 12 months from my parents on the property to make sure it isn't a bailout sale. My parents did miss a couple of payments in the last 6 months but they have gotten the mortgage current again. What's the best way to pose that to the Lender? Will that be a deal breaker for the mortgage?
Why should your new bank care if its a bailout sale? Id be tempted to try and switch lenders and forget to mention you are buying from your parents, as it isn't really relevant, unless you are taking a big cash gift from them as well?
the more info you give to the lender, the more roadblocks you set out for yourself to deal with. Don't disclose too much information in regards to buy for whom, why buying the house except stating it's a "primary residence" for you.
Why should your new bank care if its a bailout sale? Id be tempted to try and switch lenders and forget to mention you are buying from your parents, as it isn't really relevant, unless you are taking a big cash gift from them as well?
Its a preventative measure, to make sure the OP is not a straw buyer. ie, if the OP has no intention of moving in as their primary residence, be very, very cautious about proceeding.
To put it bluntly, why should the new lender take on a mortgage already in trouble?
Use caution, because lenders are arming themselves, building cases to prove mortgage fraud should the new loan go into default. Are you being asked to write certain statements? How about your parents? Are they moving? Are you moving? Are you willing to accept criminal charges for your family? (Many relatives do not know what they are asking).
Ask the title company to request a payoff. A payoff reflects the next due payment, without getting into the history.
Its a preventative measure, to make sure the OP is not a straw buyer. ie, if the OP has no intention of moving in as their primary residence, be very, very cautious about proceeding.
To put it bluntly, why should the new lender take on a mortgage already in trouble?
Use caution, because lenders are arming themselves, building cases to prove mortgage fraud should the new loan go into default. Are you being asked to write certain statements? How about your parents? Are they moving? Are you moving? Are you willing to accept criminal charges for your family? (Many relatives do not know what they are asking).
Ask the title company to request a payoff. A payoff reflects the next due payment, without getting into the history.
So like I said, relationship to the current owners is irrelevant.
I am trying to get a mortgage for a house I am buying from my parents. The bank is saying to use a Gift of Equity they want to see a Verification of Mortgage for 12 months from my parents on the property to make sure it isn't a bailout sale. My parents did miss a couple of payments in the last 6 months but they have gotten the mortgage current again. What's the best way to pose that to the Lender? Will that be a deal breaker for the mortgage?
Just wait until they have 12 months total good mortgage payments and try again. Help them pay it if you have to. If they have paid for 5 months you just have to wait 8 more. I would be troubled if they missed "a couple of payments in the last 6 months. Just missing 2 in 6 months is missing 33% of payments.
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