Purchasing and financing home from family

1 Reply

Hello all, I'm purchasing my 4th home but buying it from family and they're going to finance it.

It's been recommended that we do a quit claim deed and use a boilerplate contract for such.  However, I still don't know the best way to have the financing work to benefit us both the most with taxes, etc.  Does anyone have any resources I should look at?  The house is in Colorado if that affects the info.

I'm happy to follow up with my attorney also but I  wanted to have as much knowledge as possible first.

Thank you!

@Scott Kelley so I am way late to this post and I apologize but hope I can add useful information. Get title insurance. Do the closing through a title company. Get a general warranty deed and forego the quit claim deed. Colorado has standard form (fill in the blank) deed of trust and promissory notes. See Here (scroll down to the bottom of the page). Use those (fill in the blanks) and have your attorney review them. Much cheaper than having the attorney draft them from scratch. 

Your family member should send you a 1098 for interest paid to you at the end of the year. If you want to be very formal, there are companies that will act as a mortgage servicer for a fee and generate the forms. Not sure if it is worth it. My private loans send me handwritten 1098s. 

Not sure what to add on the benefit end. Do it like any other deal and everyone wins IMO.

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