What's the best method to purchase the house I'm currently renting from my Dad?

Question

My dad is offering me a great deal. 25 grand less than appraisal price. What's the best method to secure this deal? My credit union mentioned a Quit Claim Deed, but I'm not sure. I want to pay as little as possible out of pocket and on taxes. Any advise would be great!!!

Answer 1

It depends on a lot of things.

The first question you need to ask is what your dad plans to do with the cash. If he doesn't intend to use it for a specific purpose, perhaps he could carry the financing himself, and then your costs are having someone draw up the documents and record them. You'd just need a note, mortgage, deed, and a settlement statement.

Answer 2

A quit claim deed will get the property in your name. You should, however, call a local title company to do the quit claim deed. The title company will notarize the quit claim deed and make sure that the deed gets to the county recorder's office.

Now about the financing, how do you plan to take care of that? If you have to go to a mortgage broker to secure a loan to pay off your father then they will take care of all the deed and other transfers. I recommend that you get your own mortgage, thus paying off any mortgage that your father might owe on the property and relieving him of any financial responsibility. You will have to qualify for this type loan.

There will be closing cost and other items that will need to be paid, your father might agree to pay the closing.

You will be required to pay all taxes as they are prorated as of the day the transaction close. You will also have to pay for a insurance policy for the house.

Now if your father can carry the note on the house there are some tax advantages for him to do this, this way you will be paying your dad a monthly mortgage payment. (See your tax consultant for taxinformation)

You can take the property subject to an existing mortgage that your father might have on the house. Your father would then make a second note in his favor for the difference of the current mortgage and the sales price you two have agreed on.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 3

yes quit claim is fastest and I do believe cost less this was recommended to me as well by a mortgage company when my Mom sold me her home!

You can actually quit claim for $1.00 sales price and arrange owner financing by your Dad if he's willing to take the installment payments!

That cuts out all the middle men!!! love it!