Purchase home with cash, then obtain mortgage?

[Brent Perkins]

Hi there! We are looking to purchase our next home: our parents are willing to pay for the home with cash and then allow us to obtain a mortgage to pay them back. I am wondering how the logistics of this would work?

Possible scenario: Home is purchased at auction or wholesale by parent. Maybe title is taken with both of our names on it? Mortgage is then obtained as soon as possible to pay back parents. Parent removes themselves from title.

Is there a best way to go about this? I am sure there are many implications I am not aware of, so thank you all for chiming in.

[Caleb Jordan]

Originally posted by @Brent Perkins:

Hi there! We are looking to purchase our next home: our parents are willing to pay for the home with cash and then allow us to obtain a mortgage to pay them back. I am wondering how the logistics of this would work?

Possible scenario: Home is purchased at auction or wholesale by parent. Maybe title is taken with both of our names on it? Mortgage is then obtained as soon as possible to pay back parents. Parent removes themselves from title.

Is there a best way to go about this? I am sure there are many implications I am not aware of, so thank you all for chiming in.

 This is a strategy some people use especially for auctions because sometimes you must pay cash.

You can look into delayed financing or a cash out. Bigquestion is what seasoning requirements a lender has. Another question is it is going to be a primary residence or investment property. Are you a buying in personel name on title or with LLC on title etc. These will all impact financing options.