How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Barrister Your Own Question
Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 33766
Experience:  15 years real estate, Realtor. Landlord 26 years
19958803
Type Your Real Estate Law Question Here...
Barrister is online now
A new question is answered every 9 seconds

My wife and I want to buy a single family residence that

Customer Question

My wife and I want to buy a single family residence that requires major rehab before it can be occupied.
Banks will not provide a mortgage for such property as it uninhabitable in its present condition
My wife and I will pay cash for this property. Approx $300,000
It will require an additional $75-100 K
to fix up
This house, after rehab, will become a a first residence for our young adult son
We are giving him approx. $200,000 as the down payment, and rehab funding he will eventually take a bank mortgage for $150,000 and pay the proceeds to me and my wiife
Question is:
Should our son be shown on the purchase contract along with my wife and myself, or, should just my wife and I be shown on the purchase contract with the idea that we would eventually sell this property to my son.
My wife and I want my son to become the sole owner once he can obtain a bank mortgage and pay us back $150,000 which he had agreed to do
We want to minimize closing and re-closing fees
We live in New Jersey
Submitted: 11 months ago.
Category: Real Estate Law
Expert:  Barrister replied 11 months ago.

Hello and welcome! My name is ***** ***** I will try my level best to help with your situation or get you to someone who can.

.

Do you want son to actually become a legal owner of the house now along with you or do you want him to show you what he can do with the house before you agree to sell it to him?

.

Does he have poor credit so that putting him on the loan as an additional guarantor will help improve his credit?

.

.

thanks

Barrister

Customer: replied 11 months ago.
Do to poor condition of house, local banks will not provide my son a mortgage until it brought up to live able conditionMy son does not have sufficient funds to purchase home without a mortgageMy wife and I will purchase the property for cash and also provide funds to do rehabAt the end of the day, my son will take a $150,000 mortgage and pay this money to me and my wifeThe difference of $150,000 + the rehab costs will be a gift to my son from my wife and me
Customer: replied 11 months ago.
Sons credit rating is goodIf my son becomes legal owner along with me and my wife now, will it be easier to transfer full ownership to him 6 months from now ? Will it require a new title search, closing costs etc ?
Expert:  Barrister replied 11 months ago.

Ok, I understand your comments... .

.

If you added son to the deed along with you as a "joint tenant" now, then you can "sell" your interests to him later on so he could be the sole owner of the property and then could obtain his own loan with a purchase contract where he buys out you and wife for the $150K.

.

But any lender is going to go through the same steps for a new loan so there will be closing costs and loan origination fees that come along with it. The lender is still going to go through the same motions for his loan as they did for the original loan along with all the same fees.

.

So there really isn't any benefit to putting him on the deed now vs. selling the house to him later from a financial perspective.

.

The only benefit/difference I see is that if you waited until later to sell the house to him, then he has a greater incentive to help with the rehab and working on it since he won't have a vested interest in the house and if he didn't help, you may decide not to sell it to him at such a discount.

.

.

thanks

Barrister

Related Real Estate Law Questions