questions about buying estate home

[questionforall]

What is the name of your state (only U.S. law)? CT'

Mother's home is in Probate. There is a balance on the mortgage of less than 40,000. Market eval was done and was 145,000. Owes about 20,000 in debt credit card, hospital bills. The only funds in probate come from the home. So either I buy the house or it will be sold to pay off the mortgage and debt. There are 4 children involved which means the remaining 80,000 gets split 4 ways. I will be vested in the home with my 20,000, would need to finance the rest of the buyout for the others which would be 60,000. My mom left insurance money and 401K directly to me as benificiary so I could potentially use that to pay of the mortgage and debt, so I would only need to finance 60,000 right?

I also have my own home which I have some equity. I was offered a refinacne giving me $20,000 but that leaves me with needing to find 40,000
Before I jump and do the refinacne I asked about possibly just getting a laon to purchase my mother's home outright for that 60,000. I was told If you do a purchase loan on your mother's home you are going to have to give up inheritance rights and not be put on title of the home.

For example:
If the home is worth say $120,000 and you have 2 siblings, then you can buy the home from
them for $80,000. However, depending on the balance of the mortgage on the home remember the current mortgage has to be paid off. This can be a very difficult thing to do. Keep me updated on what happens.


I don't understand how I would loose my inheretence rights and what the loan officer meant by that so I asked and was told:


If you are on title of a home, you have ownership in it, therefore you can't purchase it, i.e. do a purchase loan for it.

Once probate transfers ownership to you after debts are paid off, where are you going to get the cash to buy out your siblings? You need to be on title 12 months to do that. A purchase loan doesn't get cash out for you.

But I am NOT on the title of the home so couldn't I purchase it using my inherited 20,000 (on paper I would not have to buy that portion out so essentially that drops the proce by 20,000? I am so confused. How does one go about purchasing an estate home in probabte?

 

[justalayman]

Your numbers make no sense.

home value 145. You pay 145. Money from sale is used to pay estate debts. Remaining cash is split 4 way.

so, 145 - 60 in debts means there is 85k left. Everybody gets ~21k

or, if you want to figure that so the 21k goes to the house, you pay 124 for the house and take nothing else. Others would get ~22k each.

125-60=65/3= ~22k.

If you pay less than 125 with you not taking anything else, you would be paying less than market value for the house and the siblings get the shaft.

 

[LdiJ]

Your numbers make no sense.

home value 145. You pay 145. Money from sale is used to pay estate debts. Remaining cash is split 4 way.

so, 145 - 60 in debts means there is 85k left. Everybody gets ~21k

or, if you want to figure that so the 21k goes to the house, you pay 124 for the house and take nothing else. Others would get ~22k each.

125-60=65/3= ~22k.

If you pay less than 125 with you not taking anything else, you would be paying less than market value for the house and the siblings get the shaft.

You also have to keep in mind that the 401k money is subject to income tax if you cash it out rather than rolling it into a retirement account of your own...so that is also going to effect the numbers.

Do you wish to buy your mother's house because you want to live in it, or is there another reason? It might be wiser to simply sell it.

 

[questionforall]

Not about the numbers

Your numbers make no sense.

home value 145. You pay 145. Money from sale is used to pay estate debts. Remaining cash is split 4 way.

so, 145 - 60 in debts means there is 85k left. Everybody gets ~21k

or, if you want to figure that so the 21k goes to the house, you pay 124 for the house and take nothing else. Others would get ~22k each.

125-60=65/3= ~22k.

If you pay less than 125 with you not taking anything else, you would be paying less than market value for the house and the siblings get the shaft.

I was just throwing numbers out there, those aren't actual numbers. I have also been supporting the estate home with my own funds which I believe I should be able to get paid back on increases my interest in the home. Just want to know if I can go to the table and request a mortgage amount for the remaining money I need, keep in mind I have cash to pay the mortgage, credit card bill and part of the other's payout. (They won't get the shaft as you say) it's all being figured in probate anyways, value of the home is 145,000 and everything is worked off that.

 

[LdiJ]

I was just throwing numbers out there, those aren't actual numbers. I have also been supporting the estate home with my own funds which I believe I should be able to get paid back on increases my interest in the home. Just want to know if I can go to the table and request a mortgage amount for the remaining money I need, keep in mind I have cash to pay the mortgage, credit card bill and part of the other's payout. (They won't get the shaft as you say) it's all being figured in probate anyways, value of the home is 145,000 and everything is worked off that.

In the interest of fairness you got the life insurance and the 401k money without having to share it with your siblings...you might not want to push the issue that you have been "supporting the estate home" too hard. Those monies are yours alone, legally but I suspect your siblings are not too thrilled about that.

 

[justalayman]

I was just throwing numbers out there, those aren't actual numbers. I have also been supporting the estate home with my own funds which I believe I should be able to get paid back on increases my interest in the home. Just want to know if I can go to the table and request a mortgage amount for the remaining money I need, keep in mind I have cash to pay the mortgage, credit card bill and part of the other's payout. (They won't get the shaft as you say) it's all being figured in probate anyways, value of the home is 145,000 and everything is worked off that.

Ok then, your calculations are way off the mark. You somehow tossed in you buying the house for 80k but in reality (using your figures to continue the example) you would actually be buying the house for 145k and using your 20k as a down payment.

I have no real idea where you get you will have to purchase the house for your 20k with an additional 60k paid to the estate or others.

If you notice in your example that you got elsewhere, notice that the purchaser is paying out 2/3 of sale price and the other 1/3 is his inheritance. It has nothing to do with any other disbursal of the estate.



You can request a mortgage for whatever you want. Whether a lender will lend you the money or not is up to them. It has nothing to do with the estate. Since everything until the closing is, or at least can be, paperwork and not actually disbursal of funds, everything up until you actually purchase (close) on the house, can be figured in that paperwork.

So, what you do is enter a purchase agreement to purchase the house for whatever the estate agrees to sell it to you. Then, probate continues. In the meanwhile, you seek a mortgage loan with the down payment on the house estimated (since you won't know the exact amount until probate is closed). When the estate is ready to close out, you complete the purchase and you accept your share of the estate. Take that share and pay it to the estate and close on the house with with your new mortgage loan.


as to you supporting the estate: have you been loaning money to the estate? If so, then the estate owes you that money. That is an outright debt of the estate. If you are giving it to the estate, the estate owes you nothing.

 

[questionforall]

purchase agreement

That is a good start. I was just trying to figure out how to actually go about seeking a mortgage loan when the numbers are not clear at this time, (I have number's swarming in my head, it is all very overwhelming to me.) Can a person go to the bank for a preapproval estimate? The mortgage left on the house is assumable as long as it is passed to a family member. Is it reasonable to call the bank who holds the mortgage and ask that bank to preapprove me for the balance and the eatra needed or should I seek out a different bank option?
But still, I was wondering what the banker meant when he said "

"If you do a purchase loan on your mother's home you are going to have to give up inheritance rights and not be put on title of the home. "

I absolutely don't know what he meant. Is there any truth to that? How could I loose inheritance rights and not have my name put on the title? If I do a purchase loan then what does he mean I loose my inheritence and not be put on the title? If you remember my original post I was offered a refinance of my home with an extra 20,000 cash out from equity in my current home but when I questioned just doing a purchase loan on my mother's home he told me that. I just didn't get it

 

[armstrong1988]

Thank you for sharing, I have the same problem Thanks also for the advice's.

 

[justalayman]

That is a good start. I was just trying to figure out how to actually go about seeking a mortgage loan when the numbers are not clear at this time, (I have number's swarming in my head, it is all very overwhelming to me.) Can a person go to the bank for a preapproval estimate? The mortgage left on the house is assumable as long as it is passed to a family member. Is it reasonable to call the bank who holds the mortgage and ask that bank to preapprove me for the balance and the eatra needed or should I seek out a different bank option?
But still, I was wondering what the banker meant when he said "

"If you do a purchase loan on your mother's home you are going to have to give up inheritance rights and not be put on title of the home. "

I absolutely don't know what he meant. Is there any truth to that? How could I loose inheritance rights and not have my name put on the title? If I do a purchase loan then what does he mean I loose my inheritence and not be put on the title? If you remember my original post I was offered a refinance of my home with an extra 20,000 cash out from equity in my current home but when I questioned just doing a purchase loan on my mother's home he told me that. I just didn't get it

You can get pre-qualification which is simply: they ask about your income and debts. They might pull a credit report, might not. With that info, they basically determine if you are qualified. It is not binding.

Then, you can actually get pre-qualified. That is where you go through the full application process and they either approve you for a mortgage loan or they don/t. Then all you have to worry about is having the house qualifying for the amount you need to borrow.

You can either chose the current bank or any other. I would shop around just like I would for any other mortgage. Best interest, best terms. Of course you do not want to go the pre-approval way for more than one bank as it will cost you probably a couple hundred bucks to do it.

what the banker is talking about makes no sense. The house doesn't get put in any of the heirs names if it is sold. It goes from the estate to the buyers name. Just because the buyer is one of the heirs doesn't alter that. The only time it would go into the heirs names is if it is decided they retain ownership for some period of time.