Buying home for less than market value

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Dsquared513

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Post Posted: Mon Dec 16, 2013 4:03 pm    Post subject: Buying home for less than market value
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My wife and I are interested in purchasing my parents house, they are divorcing. The house is valued at $92000, the amount we have discussed is around 70000. The issues that I'm worried about are closing costs and surrounding values. I dont want to lower all of the neighbors property values by purchasing too cheaply. I will also need help with closing costs. I know that noone will allow me to get cash back from the seller, but can I get a loan for 80 or 90k, have the seller give me 6% for closing costs and escrow, and then have the seller do repairs with part of the profits. A new roof is what would be done, since this would likely add to the value of the house I would imagine it would be easier to get the lender to agree with. Or should I not bring it up since it will be after the house is sold and it could be considered a gift from my parents?
Icon Mini Profile smithsussane
smith.sussane




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Post Posted: Mon Dec 16, 2013 8:17 pm    Post subject:
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Hi Dsquared!

Welcome to the forums!

You can get a loan depending upon the appraised value of the property. But your plan may not go well with the lender. So, you should get in touch with the lender and discuss the matter with him.

Feel free to ask if you've further queries.

Sussane
Dsquared513

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Post Posted: Tue Dec 17, 2013 5:55 pm    Post subject:
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Thanks for the reply. The biggest thing I'm hoping for is to avoid paying PMI for the life of the loan. Do any lenders go by appraisal value to calculate LTV or is it always purchase price now? Also, does anybody still do an 80/15/5 still, and if so is the 15% 2nd mortgage usually interest only? I know I will have to pay some MI, but with the new rules this year I really hate having to pay an extra 30 to 40k in PMI over 30 years, and with interest rates still really low I can't count on refinancing in a few years to save the money.
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adonis




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Post Posted: Tue Dec 17, 2013 9:14 pm    Post subject:
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Hi Dsquared,

As far as I know, the appraisal value will be considered by the lender in regards to PMI calculation. You will have to speak to your local lenders in order to find out whether or not 80/15/5 still exists.

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