Buying property from the estate of a family member

[Chris W.]

Hi everyone, I have a few questions pertaining to purchasing real estate from the estate of family member. There was a reverse mortgage on the house and I need help on how to structure this transaction.

The current LTV based on a appraisal performed by the current lien holder is about 56%. To avoid PMI or a second loan and use conventional financing, I'm wandering if gift of equity permitted in this situation. I'm wondering if we can use gift of equity as a "down-payment" or to reduce to LTV to at least 80%.

My cousin and I are purchasing the property. My cousin is the executor of the estate and the sole beneficiary of the estate. Will a lender scrutinize or "over-scrutinize" this? Will they ask for a copy of the will or probate docs? Should I disclose the nature of this transaction since we are essential both buyer and seller?

Also If the contract is written at a higher sale price to use the gift of equity, will transfer taxes have to be paid on both the financed and non-financed portions of the sale?

Are there any specific clauses in the contract pertaining to the payment of closing cost or gift of equity that I should look out for?

Thanks

Chris