Shingle Springs, CA · Member since 2014 · 1 post · 0 votes
Hi everyone,
First time posting and am new to this world.
I have an opportunity to buy my grandmas property at 341k and is valued at ~400k. We will have to go through probate to become administrator. My questions is, as a first time home buyer, what would be the best way to acquire this property? would an FHA loan give me any additional incentives as a first time home buyer rather than a normal mortgage? Is there a way I can keep her property tax rate or will that be reevaluated when I acquire it?
Real Estate Agent · Denton, TX · Member since 2016 · 75 posts · 54 votes
8y
Hi Blaid,
Have you served in the military? If so, you're likely eligible for a VA loan, which may be a good option. If not, I would look into an FHA loan or a conventional loan. With an FHA loan, you can get a much lower down payment but you'll end up paying PMI each month. You can get away without paying PMI charges each month if you have 20% down for the conventional loan. It really comes down to how much you have saved and how much you'd like to keep in the bank vs pay out each month.
Property taxes are evaluated each year and will likely change in 2019, but not when you purchase the property. You should be eligible for a homeowners tax exemption of some sort. Here in Texas, we have a Homestead Deduction you can claim if the property is your personal residence. Your grandmother likely had a different exemption geared toward people in retirement, so your taxes are likely going to be higher. However, I would try and get someone from CA on here familiar with the exemptions to make sure.
Real Estate Agent · Denton, TX · Member since 2016 · 75 posts · 54 votes
8y
Hi Blaid,
Have you served in the military? If so, you're likely eligible for a VA loan, which may be a good option. If not, I would look into an FHA loan or a conventional loan. With an FHA loan, you can get a much lower down payment but you'll end up paying PMI each month. You can get away without paying PMI charges each month if you have 20% down for the conventional loan. It really comes down to how much you have saved and how much you'd like to keep in the bank vs pay out each month.
Property taxes are evaluated each year and will likely change in 2019, but not when you purchase the property. You should be eligible for a homeowners tax exemption of some sort. Here in Texas, we have a Homestead Deduction you can claim if the property is your personal residence. Your grandmother likely had a different exemption geared toward people in retirement, so your taxes are likely going to be higher. However, I would try and get someone from CA on here familiar with the exemptions to make sure.
Lender · Irving, TX · Member since 2012 · 175 posts · 76 votes
8y
@Troy Ramey made some excellent points, I would also add that you should look into the 3% down payment conventional loan options, as they are typically much better loans for people with decent credit than FHA loans are.
Provided OP will owner occupy and there is sufficient equity in it, this can be done with <$2k cash to close (inclusive of down payment and all closing costs) and no PMI.
Concord, CA · Member since 2014 · 16 posts · 3 votes
8y
You mentioned probate, did she die without will/trust, that matters as to who inherits and many legal and tax consequences. FYI- Go to the county or CA websites for specifics, just one EX:"Propositions 58 and 193 exclude from reassessment property that transfers between parent and child or from grandparent to grandchild provided specific criteria are met"
California’s property tax rules can be complex. Are your parents still alive? Otherwise you can look into a grandparent-grandchild exemption for property taxes. Or maybe let it go to your parents and then to you to make use of parent-child exemption. If you’re going through probate then there either was only a will without a trust or no will or trust altogether? But if you’re buying it then it sounds as though you are not the heir to the property and will be buying it from the heir? Or the estate? Be careful about partial gift/partial sale treatment if you’re buying it for such a good price. Lots to look into here, might be worth hiring a professional to make sure you do it correctly.
*this post does not create an attorney-client or cpa-client relationship. The information contained in this post is not to be relied upon and readers should seek professional advice.