Buying A House From Your Parents – What you need to know
Priority 1 Lending
Priority 1 Lending
Published on May 26, 2023
Buying A House From Your Parents – What you need to know

Buying A House From Your Parents – What you need to know

Acquiring a home from your parents can be a sentimental journey, not to mention potentially financially advantageous. However, the process has its unique considerations and legal requirements. At Priority 1 Lending, we are here to ensure that the transition of home ownership within your family goes smoothly.

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The Process of Purchasing a Home from Your Parents

Buying a home from your parents isn’t as simple as handing over a check. There are specific steps you need to follow to ensure everything is legal and above board.

  1. Get the Home Appraised: You’ll need an accurate idea of the property’s value. Hire a professional appraiser to determine this.
  2. Secure Financing: You’ll likely need a mortgage, unless you’re buying the house outright. At Priority 1 Lending, we can guide you through your mortgage options.
  3. Hire a Real Estate Attorney: To ensure all paperwork is in order, it’s advisable to hire a real estate attorney.
  4. Purchase the Home: This is a formal process involving a written agreement and transfer of ownership, usually handled by the attorney.

Aspects to Consider When Buying a House from Your Parents

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While buying a home from your parents can have financial benefits, it’s essential to understand some key aspects:

  1. You Can’t Buy for Below Market Value Without Consequences: Buying the house for less than its appraised value could lead to tax implications for both you and your parents.
  2. Get a Mortgage or Consider Seller Financing: You may get a traditional mortgage from a lender like Priority 1 Lending, or your parents might offer seller financing.
  3. Don’t Forget About Other Costs: Aside from the purchase price, remember to factor in other costs like closing costs, home insurance, and property taxes.

Navigating Your Home Buying Journey with Priority 1 Lending

Buying a home from your parents might seem more straightforward than purchasing from a stranger, but it still has its complexities. Having a dependable mortgage partner like Priority 1 Lending can make the process less daunting.

Our team is here to help you understand your financing options and guide you every step of the way. Reach out to us today and let’s make your journey to home ownership a successful one.

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