Can my grandmother give me her house and then I get a home equity loan to pay her back?

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Can my grandmother give me her house and then I get a home equity loan to pay her back?

Instead of doing a conventional mortgage?

Asked on October 21, 2012 under Real Estate Law, New Jersey

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you and your grandmother have an understanding where the home is transferred into your name and you then get a home equity loan to pay her for it, such is fine so long as it is memorialized in writing before the transfer.

Rather than doing what you suggest, why don't you have a buy sell agreement with your grandmother where she carries back the purchase price memorialized in a promissory note and secured by a trust deed. You can then pay her over time on a monthly basis or simply get a loan on the property to pay her off sooner. I suggest that she and you consult with a real estate attorney about this proposal.


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