My grandmother is moving from gettysburg, PA and she needs to sell her house. I have been told I cannot buy it zero down. here are the details
Value by comps —> 300k
Current loan —> 83k
cash needed now —>50k
cash for rehab and cary cost ----> 30k
in one year she wants —> 117k
What i have proposed to three mortgage brokers is this:
Buy the house for 280k (must be at least 280k so i dont pay taxes on the money she is taking at the end of a year) from her. Get a loan for 163k LTV and she will take the 117k as unsecured due on sale of the house in one year. I have been told that no lender will give me a loan for 163k on this property unless I pay her in cash the 117k at closing. She is Very flexible in the contract terms and will make it say whatever we need it to say as long as the above numbers are met.
My mid FICO is 693 but i am in the process of buying another property and dont want to mess up that deal in the process. Any help in how I can get financing for this would be great. thanks
Ok looks like I needed to include a little more info
I will be flipping the house within one year. she needs 50k now and 117k within a year. she would refi but she has 0 (zero) income and cannot qualify. I am just trying to find way to put a little money into the property (cosmetic) so she can get some extra cash out at the end. this looks like to me to be a great deal.
What I have been hearing is “Gift of equity”, the issue is I will be selling the house in the near future and this will create a tax problem. She will be getting the cash from the house just later.
What I dont want to happen is for it to look like I am making a profit from the house of 167k which is really her money and going straight to her as soon as it comes in. whatever is over that amount I am willing to give uncle sam his cut.
The donee is not liable for taxes as far as IRS Gift Taxes goes. If the purchase price is 300K you should only be concerned with any capital gains above and beyond the 300K.
Good Luck!