justalayman
Senior Member
So,the seller is gifting you $450,000 (the equity in the property)
Your contrived number of $80,000 is meaningless and unnecessary. He is gifting you $450,000 because that is the amount of value he holds that you are not paying him for.
I’m not understanding why the lender is requiring any cash from you at all. In sales requiring a down payment, the presumption is the purchase is at market value. That way there is not a negative equity from the onset. With your situation, you’ll have well over $400,000 equity the moment you close. In fact, in situations like this, it isn’t unusual for a buyer to actually pull cash from the sale to use for other purposes. Of course it increases the loan amount resulting in higher payments.
I can’t help you with the tax implications though.
Your contrived number of $80,000 is meaningless and unnecessary. He is gifting you $450,000 because that is the amount of value he holds that you are not paying him for.
I’m not understanding why the lender is requiring any cash from you at all. In sales requiring a down payment, the presumption is the purchase is at market value. That way there is not a negative equity from the onset. With your situation, you’ll have well over $400,000 equity the moment you close. In fact, in situations like this, it isn’t unusual for a buyer to actually pull cash from the sale to use for other purposes. Of course it increases the loan amount resulting in higher payments.
I can’t help you with the tax implications though.