Do I need a mortgage or a Home Equity Loan?

Question

My name was added on the house when my father passed and now my mother wants me to buy her out and take full control of the house. I am confused since my name is already on the house can I even get a mortgage. I have never bought a house before so am I techinally a first time home buyer.
The house is on zillow.com for 430,000 but she is letting me have it for 225,000 which is a no brainer. I just don't know what I need to do. From what i have been reading i would like a 30 year fixed mortgage but I dont know if I even qualify for one.

I currently live in the house and the house has been paid off for years.

Answer 1

Since you are already on title, depending on the title seasoning requirements of your state you can refinance the home into your own name. Talk to a mortgage broker whom you can trust to look out for your best interests. With any mortgage transaction, your credit, income, assets, and equity of the home will be considered. An appraisal will be required on your property. As an FYI - while Zillow uses accurate information for determining value, it doesn't refine the comparable sales to match your individual home. Zillow can run very high or very low. But I wouldn't be concerned because the amount you need to borrower against what the value is (called loan to value or LTV) is low. I could go on and on, but to answer your main question - I do not believe you would be considered first time homebuyer. Where I live in California, seasoning requirements is 6 months (the time that you are on title). Good Luck!

Answer 2

I am assuming the house is paid off. Either way it is not a big issue.

Home Equity Loans or HELOCs are a lot more difficult to get than fixed rate mortgages because the are usually in the second mortgage position. However, depending on your relationship with your local bank and about 5 other factors (income, credit score, loan to value which won't be a problem, amount of credit..and more) they may not be quite as hard. The good thing about HELOCs is that the payments are interest only much like a credit card. The bad thing about them is they are a constantly adjusting rate based upon prime rate (currently 8.25%), and if you make the minimum monthly payment they will never be paid off Home Equity LOANS are fixed rate loans with a fixed repayment period. The bad thing about Home Equity Loans is that they usually have a MUCH higher rate than a regular mortgage.

I was suggest doing a regular 30 year fixed rate. You can probably get a rate right now in the high 5 to 6% mark with good credit. The term is longer than most equity loans and so the payment is less. Even if the credit isn't great, the rates won't be as high as they would be on a home equity loan. Plus, you won't be able to get a home equity loan or HELOC with poor credit, but you will almost always be able to get a mortgage.

I hope this helped you out

Answer 3

Here's the thing. Technically you are not a first time homebuyer since have had ownership interest in a home in the past three years. Since you were quit-claimed on to title, then you have had ownership interest in a house. Now is there an existing mortgage on the property? If so, then you will have to purchase it. If not, then you will have to do what is called a cash out refinance even though you're not really refinancing a loan.

The nice thing about this situation is that if there is an existing mortgage, you can purchase it and have your mother give you what is called a gift of equity. If I were you what I would do is offer to buy the house for $430,000 and have your mother or whom ever it is that your buying it from give you a gift of equity in the amount of $205,000. Keep in mind that this is not money that she will actually give you, but it will show on paper that she gave you equity in the house.


I am acutally a mortgage banker. Please email me back and I will explain in more detail.

Answer 4

Your on the title of the house already?

If you've been on title for a few months than you could do it as a refinance instead of a purchase. Have many questions for such as where have you been living for the past few years and what are you credit scores?

It's okay if your a first time home buyer. I think the best scenario for you would be to do a 50% LTV refinance. You'll get good rates and no matter what your credit is you'll be able to find a lender that will do that loan for you. Only question is going to be what the interest rate will be. It will be based on what your credit score is.

Even you need a mortgage broker to help you with this check out www.fivestarsmortgage.com. You can find info about refinance transactions and a buyers toolkit that has many articles about the buying process that may be helfpul. Best of luck to you.

Answer 5

Definately dont go with the guys who spam their services here (they cant read the community rules)...

If you have a loan, ask the loan company, if it is paid off, you can buy the house for a dollar at the deed office (county courthouse).

Call an appraiser for a correct value. zillow.com is being sued by the FTC right now for deceptive trade practices, they flat out make up values or base them off tax records which are not market value, only a real estate appraiser can do that.

Answer 6

a pair of questions first: How plenty fairness is interior the abode? Will you be spending extra effective than the $60k you have in decrease value rates on the redecorate? the two Heloc and private loan rates count on how plenty their mortgage to correctly worth is. In different words how plenty funds you're in debt as against the industry value of the abode. If there's a large style of fairness you could purely strengthen the indoors maximum loan volume and take out some funds. pay attention that lenders have relatively tightened up in this custom and you will prefer extra effective scores. I prefer this option on account which you do not might desire to truly think of roughly repaying the quantity because of the fact that is already coated on your own loan charge. additionally you may get a fastened mortgage the place your value won't flow up. On a Heloc, it works extra like a mastercard, you value and pay as you flow. be careful because of the fact a number of those have introductory rates which later strengthen. maximum Helocs are variable. many times remaining costs on Helocs are significant under on a private loan. while you're transforming into rid of a private loan you could continuously get a piggy back mortgage meaning you get a Heloc to boot interior the direction of the comparable lender. that's the final of the two worlds in case you have the fairness for it. you could in basic terms flow FHA in case you qualify and your own loan is under their decrease. You reported you would be doing slightly redesigning. FHA is amazingly choosy concerning to the situation of the valuables and you will might desire to bypass an FHA appraisal/inspection. purely contemplate whether you have been to place it on a mastercard might you pay it off quickly? maximum those that i've got seen get a Heloc with a extensive balances oftentimes do not pay it off. on account that Heloc many times have larger rates than mortgages subsequently on my own you would be extra effective off with a private loan. while you're this type of individual who pays it off quickly, then do the Heloc.