What kind of loan do I need for this deal?

[Zachary Floyd]

We have a family member with a cabin that's willing to quit claim the deed to us and use seller financing to pay off the property. She owes 70k on the property.  We'd like to pay off what she owes and we'd need a loan for that.  Then pay her directly in monthly payments until she's paid off.  

My lender seems to be confused about this and hasn't given me a straight answer about how we're going to do this.   Anyone have any ideas on what the best way to buy this property would be? Thanks! 

[Kathy Calderini]

@Zachary Floyd if I am understanding your scenario correctly you would treat this as a purchase of a second home or a non-owner occupied property. You would be required to put money into the deal as a down payment. Get a first mortgage of $70,000 with a second mortgage from your friend/relative for the remainder of the purchase price.

For example:

Purchase Price: $150,000

10% down: $ 15,000

1st mtg: $ 70,000

2nd mtg: $ 65,000

The lender will base the ltv off the lesser of the purchase price or appraised value.

If you use private money there may be the option of a gift of equity for the down payment but most institutional and hard money lenders will not use a gift of equity.

Hope this helps!