We have been told to:
1. add him to title
2. do quit claim on ourselves
3 have him refinance mortgage on
his own.
problem is we paid for this house
in full $165 three years ago and
there is no current mortgage. the
appraised value is now $220 (good
area) and he has not much cash, but
ok credit, so he is using equity
in the house as his downpayment. so
he will refinanace the entire 165k
basically. no profit to us. we
bought this for his family because
he moved down to chicago to work
for husbands company, and we had
the cash. our concern is that it
will look like we gave him a 220
property, and he will at least have
to pay taxes on the 55k gift of
equity...can we even gift this
amount and how does that effect our
lifetime gifting ability? we were
also told the putting him on title
etc that there are no closing fees
to us like a regular seller to
buyer real estate transaction would
have.
You can do a Family
Deed Transfer with a
LTV (Loan to Value) to
100 percent and No seasoning of the
property,
if his middle credit score is 600 with one of the companies I work for. I underwrite for 150 othersm but the above is one of the ways to go about it.
The
3 steps mentioned are correct - but have your brother go thru a Broker. Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to
pull credit 1 time, and they look at my
credit. A single
lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your
credit (see what I mean.) If you shop, your
credit is pulled and that is considered a soft
pull, for a 30 day period. Just like shopping for a auto, it is
good for 30 days. If you
apply for a
credit card, that is considered a "hard"
pull and it drags down your
credit score. When looking for a home, please do not
apply for a
credit card, Department Charge
Card, Gasoline
Card or make any major purchases, like a auto, etc. This will
pull your
credit down.
Try to find someone (broker) that will
pull your
credit one time, and submit your
loan application to company's that will go off his
credit report. By the way, a
loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in
3 days, that is per the RESPA laws, and the TIL (Truth in Lending). The GFE will tell you the up-front
closing cost associated with your
loan. The TIL will tell you the terms, rate associated with your
loan. This is a estimate only - not the final - but it does help you figure things out.
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