Probate, 60k equity, first time home buyer, tax mitigation

[Blaid Butler]

Hi everyone,

First time posting and am new to this world. 

I have an opportunity to buy my grandmas property at 341k and is valued at ~400k. We will have to go through probate to become administrator. My questions is, as a first time home buyer, what would be the best way to acquire this property? would an FHA loan give me any additional incentives as a first time home buyer rather than a normal mortgage? Is there a way I can keep her property tax rate or will that be reevaluated when I acquire it?

Thanks in advance! 

[Troy Ramey]

Hi Blaid, 

Have you served in the military? If so, you're likely eligible for a VA loan, which may be a good option. If not, I would look into an FHA loan or a conventional loan. With an FHA loan, you can get a much lower down payment but you'll end up paying PMI each month. You can get away without paying PMI charges each month if you have 20% down for the conventional loan. It really comes down to how much you have saved and how much you'd like to keep in the bank vs pay out each month.

Property taxes are evaluated each year and will likely change in 2019, but not when you purchase the property. You should be eligible for a homeowners tax exemption of some sort. Here in Texas, we have a Homestead Deduction you can claim if the property is your personal residence. Your grandmother likely had a different exemption geared toward people in retirement, so your taxes are likely going to be higher. However, I would try and get someone from CA on here familiar with the exemptions to make sure. 

Hope this helps!