Banks? No wonder everyone hates them

[Mulligan]

Since my dad recently passed, my kid brother is buying the family house from my mother. I'm permanently disabled, so rent and have never had the pleasure of buying a house.

In any case, 600 for the credit union to look for a interest rate. Another 1400 to lock it in, and another 5500+ in closing costs. Unbelievable.

There's no way around any of this either is there.

 

[DuckDogs]

Is this a normal arms length transaction? If so, there is no need to pay the first (2) fees you list and depending on the amount of the mortgage - I assume you could minimize the closing costs as well.

I have bought several properties over the last few years - never paid a penny for anyone to "find" a rate or lock it in.

 

[Mulligan]

I'm not sure of the term "arms of length transaction", I'm not sure we have that terminology in Massachusetts. But in simplest form, it's a mother selling her home to her son.

Real estate is not an Avenue I ventured within, I just hate to see my mom and my little brother get worked over by a bank. Thanks for your input much appreciated.

 

[william13]

have her give it to him ... after its his take out a loan on it to pay her ,, ?

 

[The Joker]

have her give it to him ... after its his take out a loan on it to pay her ,, ?

She can sell it to him for a dollar.

 

[DuckDogs]

If they were treating it as an "arms length transaction" - they would basically be treating it like (2) parties that had no affiliation with each other.

Otherwise -I believe there are tax implications on any "gift" over $13,000 like the scenarios joker and william describe. If he is married - your mother could "give" it to him and his wife, but there would be taxes due on whatever the value is in excess of the $26,000 allowed gift(and I think that tax rate is HIGH).

Regardless - they are getting screwed with those fees.

Somebody correct me if I am wrong - I am certainly not an accountant.

 

[smurphy]

I hate them because they constantly try to trick customers into paying monthly penalties on things that make no sense. Balance too low (only punishes people struggling), didn't use ATM enough, used ATM too much, used debit, but didn't use credit enough, etc etc.

 

[tcon142]

not sure why the cost to look for and lock in a rate, that doesn't sound right, unless your brother had agreed to pay a discount point to buy the rate down, which means paying a % of the loan amount to get a lower than market interest rate.

Secondly this would not be considering an arms length transaction so there would probably be some additional requirements such as a second appraisal for value which would be an additional cost.

They could as Joker stated transfer ownership for $1 via quit claim however by them selling it, doesn't sound like them giving him the property is their intention.

Lastly they could gift your brother some equity in the property along with the sale that could afford him the down payment and cover his closing cost.

Your brother could mention those options to his CU and they should be able to figure it out.

Good luck!

 

[saint]

By and large the biggest collective group of pricks out there. It's a typical power situation- they control the money, therefore, they control you (and me) to some fashion. They can request whatever they want. They can make you pay ridiculous fees. Why? Because they have the money.

The irony is that the pricks I have been subjected to act all high and mighty because of their power position but most make low incomes- yet they act like the money they dole out (or deny) is their own.