Purchasing a 2nd Home from a Relative?

Question

Hi.
I am planning to purchase a 2nd home (to keep it in the family) from an older relative who lives out of state. I currently have a primary residence which I would like to sell in a couple of years. Would it be wise to start a new loan, home equity loan or home equity line of credit.

Thanks

Answer 1

You have to weigh the closing costs between each type of loan and what your hold time is. You will get lower closing costs on a HELOC or you can do a low cost first mortgage. What you need to do is look at each option and weigh the costs and benefits of each option and make the best choice for you. On lower loan amounts the rates are not as much an issue as higher loan amounts between the savings of closing costs and monthly payments.

Answer 2

If you can get a mortgage on the property you're buying, the interest rate would probably be lower than on the other types of loans you mention.