My aunt wants to give me her house but

posted 2 years ago in Home
Post # 2
Member
14948 posts
Honey Beekeeper
  • Wedding: June 2011

Are you living rent free in grandmothers house?  How much would the mortgage be on aunts house vs how much it’s worth and is it affordable?

Post # 3
Member
2107 posts
Buzzing bee
  • Wedding: August 2014

It’s not going to be as easy as your aunt thinks it is. You can’t just decide to transfer a mortgage into someone else’s name. You need to qualify for a mortage on your own, and they will need to sell you the house, even if for $1. But someone needs to pay closing costs. Can you afford that? I also would NEVER purchase a house without an inspection, regardless of who is selling to me. Have you considered what might happen if the inspection revealed issues – i doubt your aunt and uncle would agree to making any repairs so you need to be prepared to pay out of pocket. Honestly you cannot tell if a house is structurally sound just by looking it. On another note, this could also have tax implications for your aunt and uncle that they may not have thought through While this is a very generous offer, I’d be concerned about what happens if you sell. Will your aunt and uncle expect a share of the profits? I’d get that clearly stated in writing. You and husband, separate and apart from your aunt and uncle, need to speak with a real estate attorney. 

Post # 4
Member
1361 posts
Bumble bee

I’d be suspiscious that the mortgage on the house is more than the house is worth. Otherwise, why woudn’t they put it on the market to recoup the equity they’ve put into it? Sounds like a headache.

Post # 5
Member
7921 posts
Bumble Beekeeper

chrissybee :  I would pay for a formal inspection just as you would if you were buying a house, just so you can have an idea of how much work you need to put in. When we bought our house the seller was shocked when we went back and said we wanted to renegotiate price because of issues he hadn’t even noticed. He thought the house was fine. It was FAR from fine hahaha.

If it checks out and it is something you could easily rent or sell when you want to move I think this is very generous of your aunt. Just make sure you are even ABLE to take over the mortgage – many aren’t transferrable once the ownership changes hands. And do not do anything unofficially – I know she is family but this is a business transaction. If you are to be the new owners go down to the country registry and change the deed. 

Post # 6
Member
1547 posts
Bumble bee

littleanchor :  yes all of this.

This is not as cut and dry as your aunt may make it seem. You may live in a county or state that has transfer taxes based on the fair market value of the home, not what is actually paid. Be careful bc those can be thousands of dollars up front, and no lender will let a mortgage be assigned without a deed transfer. 

Sounds like you should graciously pass on this.

Post # 8
Member
5583 posts
Bee Keeper
  • Wedding: July 2018

She could just sell the house for a lower price without fixing anything, this situation doesn’t really make sense to me.

How much equity does your aunt have in the house? Is it normal for her to give you that amount of money?

There are still legal fees and surveys to deal with and it might not be worth it if you’re planning on selling in a year.

Post # 10
Member
7413 posts
Busy Beekeeper
  • Wedding: October 2014

It’s not as simple as just calling the bank and asking them to change the name on the mortgage. The house needs to appraise for at least what the current mortgage is, and you need to still have decent enough credit and a big enough down payment to get a mortgage in your name; plus no lender will write a convetional loan on a house that needs a lot of work (cosmetic or otherwise).

At any rate, if you plan to move in a year, you should decline your aunt’s offer. There is no benefit to buying a house just so you can turn around and sell it in a year; your credit will suffer for it, making it harder to buy another house in another town, and unless you have the income and credit to qualify for two mortgages, you won’t be able to keep this one to rent out if you do move away in  a year and buy a home in a new town.

Post # 11
Member
11640 posts
Sugar Beekeeper
  • Wedding: June 2015

chrissybee :  what has the house appraised for and what is the mortgage amount?

What does she mean by turn over the mortgage to you? 

 

Post # 12
Member
14948 posts
Honey Beekeeper
  • Wedding: June 2011

I agree with littleanchor with all the nitty gritty details.   But if all checks out and it’s a good deal, I’d go for it. Even if just to fix it up and sell it for profit.  It may take the year you’re there and you may not get to enjoy it if you leave, but you’d reap the benefits in money down on your next house.

Post # 13
Member
2477 posts
Buzzing bee
  • Wedding: May 2017

chrissybee :  are you not able to save and buy your own home? You can have your own home without it being your aunt’s.  I might be a little weary like other PP said because she could easily sell it and move on with her life. Unless she thinks there’s too much work to be done and that nobody else will want to buy it so they will leave and it will sit? But if she really is willing to take the loss of any equity she built in the house  (if she did) why not be ‘generous’ by selling it and giving you guys some of the money to buy your own home? I question everything and this doesn’t make too much sense to me. 

Post # 15
Member
11640 posts
Sugar Beekeeper
  • Wedding: June 2015

chrissybee :  got it! Well, those questions I asked might be something to bring up to her, but for sure to know if you decide to seriously consider this.

Other bees had great input as well. I don’t think anyone is trying to smear your aunt, just saying this is a huge financial commitment, you want to be aware of all of the details. Sometimes people who mean well don’t understand all of the details either, you know? So, just trying to look out for you. 

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