Down Payment question

[lamonica]

Texas

My wife and I are buying a home from a friend in Texas. She is a retired widow who is moving to Oregon in June. We have agreed on a price, and neither party wishes to use an agent/broker.

We are saving in order to put 20% down to avoid PMI. We won’t have that amount saved until September. In the meantime, we’re going to rent our friend’s house after she has moved in June. She is flexible, and doesn’t mind if we close in September or even a few months later. We’d like to close as soon as possible because interest rates are rising.

Our dilemma: Our friend does not have the resources to move to Oregon. We want to advance her some money to use for her move, and have that apply as part of our down payment. Apparently, when earnest money is extended under a contract offer, it must be kept by a third party in escrow, and would therefore be unavailable to our friend for moving expenses. Is there an addendum/form in Texas that allows what we wish to accomplish? Would a lease/purchase allow us to advance her the necessary funds in a way that lenders would allow? Thanks very much for your assistance.

 

[HomeGuru]

Texas

My wife and I are buying a home from a friend in Texas. She is a retired widow who is moving to Oregon in June. We have agreed on a price, and neither party wishes to use an agent/broker.

We are saving in order to put 20% down to avoid PMI. We won_t have that amount saved until September. In the meantime, we_re going to rent our friend_s house after she has moved in June. She is flexible, and doesn_t mind if we close in September or even a few months later. We_d like to close as soon as possible because interest rates are rising.

Our dilemma: Our friend does not have the resources to move to Oregon. We want to advance her some money to use for her move, and have that apply as part of our down payment. Apparently, when earnest money is extended under a contract offer, it must be kept by a third party in escrow, and would therefore be unavailable to our friend for moving expenses. Is there an addendum/form in Texas that allows what we wish to accomplish? Would a lease/purchase allow us to advance her the necessary funds in a way that lenders would allow? Thanks very much for your assistance.

**A: you had better think this through again very carefully.

 

[lamonica]

I appreciate the concern this scenario routinely arouses. However, I truly am seeking an answer to my question. I understand that many times, those who post are working through an adversarial situation. The friend I refer to is the recipient of 8 years of love and assistance from our family. She is someone to whom we "minister" both personally and financially because we have chosen to. In fact, I will be paying for her moving expenses out of my own pocket if I cannot find a way to apply it to my downpayment.

Were I to read my own question, I would probably recommend caution with my response as well. Unfortunately, so far, I haven't been able to get answers. I'm hoping someone will get past the "advisability" to the question .

 

[HomeGuru]

I appreciate the concern this scenario routinely arouses. However, I truly am seeking an answer to my question. I understand that many times, those who post are working through an adversarial situation. The friend I refer to is the recipient of 8 years of love and assistance from our family. She is someone to whom we "minister" both personally and financially because we have chosen to. In fact, I will be paying for her moving expenses out of my own pocket if I cannot find a way to apply it to my downpayment.

Were I to read my own question, I would probably recommend caution with my response as well. Unfortunately, so far, I haven't been able to get answers. I'm hoping someone will get past the "advisability" to the question .

**A: yada, yada. yada**************..I'll save you some trouble lady. Do not do what you are planning to do.

 

[LindaP777]

Texas
Our dilemma: Our friend does not have the resources to move to Oregon. We want to advance her some money to use for her move, and have that apply as part of our down payment. Apparently, when earnest money is extended under a contract offer, it must be kept by a third party in escrow, and would therefore be unavailable to our friend for moving expenses. Is there an addendum/form in Texas that allows what we wish to accomplish? Would a lease/purchase allow us to advance her the necessary funds in a way that lenders would allow? Thanks very much for your assistance.

Do a "lease with option to purchase" and give her $XXX in "option money". This will be applied to the purchase price when you close in September. I can help with forms, if you'd like. I've done numerous ones.

 

[HomeGuru]

Do a "lease with option to purchase" and give her $XXX in "option money". This will be applied to the purchase price when you close in September. I can help with forms, if you'd like. I've done numerous ones.

**A: oh brother.

 

[lamonica]

Thanks.

LindaP77
I'd appreciate the help. Thanks for reading my post (carefully). Let me know how you'd like to proceed.

HomeGuru,

Again, thanks for your concern. If you'd read my original post, you wouldn't have referred to me as "lady..." My wife would find that amusing, considering (among other things) that I am 6'3" and 225 pounds. Maybe it was the use of "Lamonica" as a user name (as in Daryl Lamonica, Mad Bomber quarterback of the Oakland Raiders, circa 1968+). In any regard, thanks for putting some humor into my morning.

 

[HomeGuru]

that's funny**************.I'll get another cup of coffee.

 

[LindaP777]

LindaP77
I'd appreciate the help. Thanks for reading my post (carefully). Let me know how you'd like to proceed.

Are you comfortable posting your e-mail address? I can send you those forms and you can just edit as necessary.

 

[Gadfly]

Friend or no friend, you need to keep this an arms-length transaction. Just read this board about all the people who made deals with friends and family only to seen friendships end and families torn apart.

When this all falls apart, don't expect any bleading hearts here.

 

[pojo2]

and neither party wishes to use an agent/broker.

Only a very foolish person would proceed with this without a professional making sure it is done properly, ESPECIALLY since you are dealing with a friend! Be that an agent or Atty.

I am in the group who thinks you are out of your league on this one. Forms should be filled out by those who understand them and want them to stand up in a court of law.

You think our responses are inappropriate but we have seen it all here and as Gadfly stated friends and family can become bitter enemies and do not be so foolish as to think you are above that with this transaction.

 

[pojo2]

In addition have you had and inspection of the home, an appraisal of the home, termite inspection, have you had a title search done yet, in other words all the things a prudent buyer has done before a purchase or entering into a contract? No I am NOT talking about the things the Mortgage company will eventually need as well.

 

[justalayman]

Are you comfortable posting your e-mail address? I can send you those forms and you can just edit as necessary.

If the both of you have your PM function on, lamonica can PM his e-mail to just you.

 

[garrula lingua]

Why not just split the two transactions.

Make a loan to your friend and have her sign a promissory note for the amount.

Get credit, for any amount still due, at the closing.

 

[LindaP777]

Lamonica - turn on your Private Messaging.
Go to "User CP" (top left)
Then go to "Edit Options" (in the left column, under Setting & Options)
Scroll down and check "Enable Private Messaging".
Send me your e-mail address and I'll send my contracts to you.