Refinance subject to in-laws

1 Reply

Hi Everyone,

My in-laws recently asked my wife and I to purchase their home.  They are unable to keep up with the mortgage payment and maintenance of the property.  There are quite a few projects that need to be done but tbey dont qualify for a cash out refi since the only income they have is social security ( there is over 200k equity).  I had made an offer  to buy the home about 6 months ago, but they decided not to for one reason or another.  Now my money is tied up so I have very little cash for closing costs.  My father in-law has become ill and he desperately wants to get out of a mortgage.  They really want to stay in the property and basically begged me to take over the mortgage, but based on past history, I'm not doing anything without a contract.

Here's my idea: purchase the home from them subject to the existing mortgage.  Then refinance so that I can fix the problems in the house, give them a little bit extra from the equity (50k or so), and payoff my own debt (car and credit cards).  They would then live out their days in the house rent free with their cash and social security checks free to spend as they wish.

Questions:  can this be done?  Is it the best idea?  I'm open to suggestions.  I've heard there are time limits as to when you can refinance a subject to purchase but also some exceptions.  Does that apply in this case?

Thank you

I'm mostly just bumping your thread up because I can't answer most of your questions.  Hopefully someone else will this next go around.

However, here are my opinions.  You are VERY kind to do this for them!  Even KINDER to give them $50k after buying their house.  This sounds like a terrible deal from a financial standpoint (IMO), but this is also a family situation, so there's that. 

Have you considered renting it back to them for a reduced price so you only leak money instead of hemorrhage it?  Is there a way your family could move in so you could rent your place and make up money you are losing with your in-law deal?  Do they have a spare bedroom and would they be open to a renter (especially if it's a part of the deal to, again, prevent the hemorrhage)?

Good luck with whatever you decide!

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