buy house from bank
What are the steps required to buy a house from parents below (way below) market value of the house?
I want to purchase my parents house from them, below the market price, any advice from lawyers, bank loan officers? Oh and what about closing cost fees?
There’s no difference, really, than buying it at full market value. The appraiser will state that the home is worth a lot more than the sales price. This is then justified by the fact it’s a transaction between relatives.
Let’s say the house is worth $200K and your parents are selling it to you for $100K. The amount the bank will lend depends on the appraised value, not the sales price. So, if you finance that $100K with one loan, you’re at a 50% loan-to-value ratio and you’ll probably get a great rate on the mortgage.
By selling the house to you at such a low price, your parents are basically making a huge down payment for you. So, the loan will be very easy to get and at great terms.
