I thought I understood all the steps for purchases, but running into some in providing help to a family member. My purchase was with realtors involved and fairly standard purchase, so there’s a few differences.
Details:
- $100k purchase price from an in-law, want to purchase with mortgage. Possibly a 95-97% LTV with refi 6 months later. But otherwise 90% if possible.
- Tax assessment is much higher than 100k but realistically probably a max of 110-120k actual value.
My unanswered Questions:
- How to handle the purchase contract? Where to get it from, who to review it, etc? Don’t have an attorney reference and seems like that could quickly get expensive for such a small transaction. Where to file the contracts, etc? Title company directly?
- Non-arms length --> I am seeing there is a form to file and a lot of complication for FHA. But, for conventional I don’t remember signing a form that I did not have a relationship with seller. Is this notification even required? Will the lender be able to add conditions due to not arms-length? (Online searches seem to indicate they Cannot add their own conditions under fannie/freddie guidelines when it’s going to be primary residence). Seller’s last name may not match the last name of buyer if only one person ends up on title.
- Non-arms length --> more risks for underwriting? higher down payment required? etc
Parts I DO know:
- Shopping for title co to handle closing and title insurance (exception if they also will generate/handle the contract completely)
- Shopping for mortgage (exception if not arms-length changes things).
- all the standard mortgage terms and requirements: pricing, inspection (sort of, they seem decided on it but maybe it has more issues), appraisal, DTI, reserves