Buying house from parents, questions, loads

psychofishy · Joined: 12 Dec 2007 Posts: 2

Hi, my husband and I live with my mother and step father. Both have serious addictions that have caused them to get into deep financial difficulties. My husband and I have been thinking that we might like to buy the house from them, but we would buy it, we don't want to take over their mortgage as their credit rating is terrible, and their interest rate is ridiculously high. However, this house is worth a lot less than it was when they bought it, and the remainder of their mortgage is still quite high. We would want to buy it at a lower price than they purchased it for. But we're worried that since they still owe so much the mortgage company might get suspicious if they sell the house cheaper to their daughter and son in law. Are there any options here?

jrhartman · Joined: 01 Apr 2007 Posts: 107 Location: Michigan

if you buy it for less then they owe how will they pay off the remainder of the balance?

that question aside, if they are behind on their mortgage many lenders will consider it a bailout and will not finance your loan.

psychofishy · Joined: 12 Dec 2007 Posts: 2

Hi,

There's practically 3 possible options here.

1: we move out, they move out, they sell the house...

With this option we'd all lose the house, nobody would benefit from it, and they'd still only get 2/3rd of the money they owe the mortgage companies, because the house simply isn't worth what they paid for it (this is a fact, not an opinion, we'd be suprised if they even got as much as 2/3rd for it)

2: they move out, we buy the house from them for what it's worth (still only 2/3rd, we don't want to pay more than what the house is worth)
In this option we benefit greatly from it, because we love the house, and want to keep it if possible (just not for the outrageous price they're paying at this moment.. bad credit & they paid roughly 20k too much for it because they didn't do an appraisal when they got it)

3: we move out, they stay in the house... can't pay for the bill, house will without a doubt get foreclosed on (we were REALLY close to this before.. it's a miracle we got out of it)

Please tell us what the legal options are for buying the house from them for the price it's actually worth.. note: this IS less than their mortgage debt

Thanks in advance