I’m in an extremely fortunate position where my Mom, upon learning about current mortgage rates and why I haven’t bought a house yet, wants to essentially be my bank to buy a house. As in, she wants to fund the house, put it in my name, and I pay her a reasonable down payment and pay a “mortgage” to her at 2-3%. So what would be the best way to do this?She buys the house then transfers the deed? Should she just transfer the cash and I purchase it?
Side note: I know people are usually against doing big purchases with family, but I don’t really see a downside since the house will be in my name, and with that 2-3% rate, the payments will be similar to my rent even considering maintenance and property tax.
This is generally known as “land contract/contract for deed”. People do it all the time. As suggested in another comment, you should consult an attorney. If either you or your mom is hesitant to do that, you should ask yourself what happens to your house and mortgage if (God forbid) your mom were to die? Don’t wait to find out. Get an attorney and make sure that it’s all ironed out in advance.
Interesting. Looks like a land contract would have the deed be in my Moms name, but we want the deed to be in my name from the start. I know I should consult a lawyer, but do you know if this land contract can be set up this way?
I don’t know.