Gift Of Equity
Hi I hope that someone will be able to help me. My husband and I are first time home buyers. We are currently starting to buy our home from my father in-law in Merrick, NY The apprassal had come in at $375,000 he is selling us the house for $325,000. One mortgage lender had mentioned something to me about a gift of equity. I do not understand what that means can someone please help me out. I have all these lenders calling me and I am getting all confused with all of these different terms and which way to go. Thanks for all your help if you can. :-? :cry: :cry:
A gift of equity works like this. You enter into a contract to purchase with your Father in law for the $375,000 number. When the lender asks where you are getting the down payment from you reply that your FIL is willing to give you $50,000. They will want a letter from the FIL that this is a gift and that he does not expect to have it repaid. There is a form for the letter.
Some unsolicited advice. Find one good mortgage broker and work through them. This will elimate all those calls.