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.
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