Q: My father-in-law has an acre of land in Las Vegas, Nevada. My wife and I have been living here for a year and he now lives in North Dakota. We want to buy the house from him because it has been in the family for so long but he owes $230,000 on it still. We have talked about it and he wants to subdivide the yard so he keeps back half and we can buy the front half. How would this work and what would pricing be since he owes so much on it? We really want the home but don?t want to pay off his debt to do it, especially since we could buy a home today for cheap.
?Anonymous, Las Vegas, NV
A: Have you heard of the Home Affordable Refinance Program (HARP)?
If you?re not behind on your mortgage payments but have been unable to get traditional refinancing because the value of your home has declined, you may be eligible to refinance through MHA?s Home Affordable Refinance Program (HARP). HARP is designed to help you get a new, more affordable, more stable mortgage. HARP refinance loans require a loan application and underwriting process, and refinance fees will apply. You can find information by searching the web for terms like ?making home affordable?.
Your father-in-law may want to see if he qualifies for the HARP program. It might help him manage the cost of the mortgage if he is not currently in a good loan program.
In the meantime, would your father-in-law grant you a Life Estate with first right of refusal to buy the property?
The only way that subdividing the property will increase the value is if a house is built on the vacant lot. At that point it could be sold to help pay off the existing mortgage or rented out as income property. If the city will allow you to subdivide, you may want to consult with a lender too and see if they will give you a wrap-around loan to combine the two parcels into one mortgage and even possibly fund the building of a structure on the vacant lot.
Denise Shur is a Realtor? with 1:1 Realty in San Jose, CA.
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Related posts:
- HARP Boosts Homebuyer Confidence
- Underwater Homeowners Receive Refinancing Help
- What Can We Do About Our Underwater Mortgage?
- Can My Father Buy A House For Us?
- How Can I Sell If I Have An Underwater Mortgage?
Source: http://www.realtor.com/blogs/2012/10/17/can-we-subdivide-my-father-in-laws-property-and-buy-half/
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