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Old 09-09-2008, 11:12 AM
 
Location: New York
2,251 posts, read 4,160,232 times
Reputation: 1607

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Looking for advise from the mortgage pros.

Looking to sell my investment property to my daughter and husband. They have good income - ok credit score.

Value is about $275k, owe $190K. I want to sell it to them for what I owe.

Someone told me about a gift of equity, that they come to the closing table with very little out of pocket?

Can I use the gift of equity with a 6% sellers concession to do a FHA loan?

Thank You.....
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Old 09-09-2008, 11:36 AM
 
Location: Fort Myers, FL
1,286 posts, read 2,594,435 times
Reputation: 249
just curious, how do you sell a property to your husband? he would already be an owner
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Old 09-09-2008, 11:39 AM
 
Location: New York
2,251 posts, read 4,160,232 times
Reputation: 1607
Sorry my daughter and my son-inlaw..
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Old 09-09-2008, 11:54 AM
 
4,542 posts, read 11,542,319 times
Reputation: 3063
Quote:
Originally Posted by Modification Specialist View Post
Looking for advise from the mortgage pros.

Looking to sell my investment property to my daughter and husband. They have good income - ok credit score.

Value is about $275k, owe $190K. I want to sell it to them for what I owe.

Someone told me about a gift of equity, that they come to the closing table with very little out of pocket?

Can I use the gift of equity with a 6% sellers concession to do a FHA loan?

Thank You.....
No need for FHA.

Sell it to them for $190k+costs (say $6k)=$196k with a gift of equity (over 20%) and seller paid closing costs and they can buy it from you with $0 out of pocket. Very slick way to go.

ps. Rates are awesome right now. They should lock immediately on a 30 yr. fixed in the upper 5's.
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Old 09-09-2008, 02:25 PM
 
Location: Fort Myers, FL
1,286 posts, read 2,594,435 times
Reputation: 249
another option, call your bank and see if they allow the mortgage to be re-assigned, they will still have to qualify, credit score/income, but it would be a simple transfer of title and liens.
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Old 09-09-2008, 05:23 PM
 
Location: Apple Valley Calif
7,475 posts, read 19,561,668 times
Reputation: 5575
I was told if I sold a home to my daughter for an undervalued price like OP states, it would be considered a gift, with appropriate taxes to deal with. Same thing with re-financing it for her, and not charging enough interest. The goverment knows and watches out for such tricks...
How do you get around that...? I don't know, just what I was told when I looked into such dealings...
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Old 09-09-2008, 11:33 PM
 
Location: Fort Myers, FL
1,286 posts, read 2,594,435 times
Reputation: 249
transfer it to a trust and then sell it to her that way with a contract. call a CPA for advice
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Old 09-10-2008, 07:39 AM
 
Location: Tampa,FL
54 posts, read 238,572 times
Reputation: 18
I am assuming it is your investment property and it will be the primary for your daughter? if so, then you can do as previously stated and up the sale sprice slightly to help her out. You can probably use FHA, but like most other loans today, she will have to prove income. They consider this a non arms length transaction due to your relationship. Most appraisers wont use this one when doing an appraisal for someone else down the line since they know there can be some "extras" in the deal.
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Old 09-10-2008, 11:19 AM
 
Location: Fort Myers, FL
1,286 posts, read 2,594,435 times
Reputation: 249
if she is going to live in it, just have her live there for a year and use a lease option. after a year she can refinance into it.
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Old 09-10-2008, 02:46 PM
 
Location: New York
2,251 posts, read 4,160,232 times
Reputation: 1607
Thanks for the advice guys - spoke to another person (on another forum) - said I can go to 85% LTV because of Seller/Buyer is family.

Found out today her credit score is $570, she had multiple late payments to a credit card. Looks like FHA is the only way to go.....

..
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