Buying home from family friend, want to grab a KILLER deal...

[Joseph Denesowicz]

I am currently looking to buy a family friends house that my family is currently renting. The friends were interested in selling their late Mother’s house earlier this year, and I was interested. However after talking to a lender (multiple lenders), they informed me that because my income is all cash and a new career, I need to show one more year of taxes before getting a loan. My friends offered to rent me the house for way under market value until I can get the loan. So we currently are renting the home. We do not have much in savings for a down payment, however, our friends agreed to sell us the house for well under market value. The house hasn’t been appraised but let’s say hypothetically the house is worth 400,000 and they would sell to us for 350,000. Is there a way to use that “gift of equity” as down payment, or any other options to help us out and save some money. Maybe suggest seller finance? The down payment? How can we make the most of this generous opportunity. Thanks guys!

[Doug Pretorius]

@Joseph Denesowicz You're already renting it, just ask them to do a rent to own for a couple of years and exercise your option to purchase as soon as you have the cash and can qualify for the financing. If you're in the US you'll still need at least 3.5% of your own money to put down to get an FHA loan. If you're in Canada you'll need 5% down.

If they're willing to sell to you with owner financing then you can come to whatever arrangement you want as far as down payment, price, interest rate, and amortization since there's no bank involved.