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Discussions tagged with 'Gift of Equity Home Purchase'
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Can we go over a case scenario on a gift of equity home purchase? Homeowners (Let’s call them John and Jane Doe) of a nice two-bedroom and two-bath condominium; the property is worth $320,000, and the mortgage on the property is $180,000. John and Jane Doe are in a current Chapter 13 bankruptcy repayment plan and have been in the plan for a year. However, the bankruptcy payments to the trustee are in arrears by 4 months, and they cannot refinance. The good news is that John and Jane Doe have a 45-year-old married son (Let’s name him Junior) with a child who is renting and wants to buy John and Jane Doe’s condo. John and Jane Doe are willing to sell the condo to Junior for 10% below the appraised value, which is $320,000 x 0.90%, $288,000. The cash proceeds to John and Jane Doe are $ 288,000- $ 180,000, or $108,000. With the cash proceeds, John and Jane Doe want to buy out the Chapter 13 Bankruptcy ($40,000) and use the proceeds to buy another property (hoping the arrears in bankruptcy will be paid off, re-establish credit, and let the voluntary bankruptcy dismissal season pass so they can qualify for a home purchase mortgage). How would this work? Can you please advise a step-by-step process for the above case scenario?
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