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Real Estate Home Mortgages/Purchasing a home with equity from family


We are in PA and I'm trying to help a friend of mine who would be a first time homebuyer down the mortgage road. He has recently been given the opportunity to buy his grandparents home. Here's the situation: he doesn't have the cash on hand for the down payment, closing costs, etc. There is a current loan on the home with a balance around $30,000 (roughly) in both grandparents names (the home has a market value of approx $50,000). The grandfather died last year (2011) and the grandmother is in a nursing home. Could he purchase the home for the balance of their loan using the equity already in the home as the down payment and closing costs? Or, would it be more beneficial to be willed the home upon her death? The big question is the nursing home. They are concerned with what the nursing home would do if she died. Could they take the home and sell it?


Your friend can try to purchase the home and assume the existing loan, However, he should check the court records (they are public) to see whether the nursing home has already placed a lien on the property. It is very common for nursing homes to protect their interests by recording a lien, and if that's the case, it would complicate the situation for your friend.

Best wishes,

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This topic answers questions related to purchasing a home, owning a home, home ownership, mortgage education, mortgage applications, and mortgage needs whether buying a first home or refinancing a current loan. Issues related to home ownership, home equity, mortgage education, refinacing options, home improvment finacing, first time home loans, home equity loans, vactation home loans, and mortgages for investment homes are dealt with here also. Though not the primary focus of this topic, Home Equity Lines of Credits (HELOCS), reverse mortgages, and calculating home equity may also be asked. If you do not see your home mortgae, home finacing, or home equity question answered in this area then please ask a question here

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Eric Forster


Did your last mortgage broker or lender trick you into a messy situation which could cost you your home? I've been close to 30 years in the mortgage industry, and I've seen it all. Believe me, it is not pretty. As the owner of a mortgage company I am called frequently to testify as an expert witness in mortgage fraud cases and other cases where lenders did not fully disclose the terms of the loans they were offering to the borrowers. I have seen fraud being committed by borrowers - and by lenders. It's a tough world out there. And by the way - you are invited to visit my website,


More than 25 years in loan production and underwriting in Southern California.

Mortgage Bankers of America (Southern California Chapter)

Former columnist for AOL Financial Center and the author of a mortgage primer.

MBA (Finance)

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