We are looking to downsize from our current home to reduce our ongoing housing costs, have less house to maintain inside and out and to eliminate the remaining balance on our mortgage. Our equity in the home in close to 70% of the likely sale price based on a comparable property across the street that recently sold and we did have an initial discussion with a realtor. I just received a significant inheritance so I currently have 70% of the cash on hand to cover the cost of a new house we’re interested in that just went on the market today. My father is willing to loan to me cash to cover the balance of the cost of the home which I would then pay him back with interest after I sell my current home. This would avoid me having to get interim financing for buying a new home and my intent is to no longer have a mortgage regardless. In other words, if I was in a position where I needed to get a mortgage to buy the new home I would have paid that off entirely with the equity freed up from the eventual sale of my existing home.
A sibling had recently taken a loan from my father which my sibling is now ready to pay him back the principal with interest. I’ve communicated to my family my desire to borrow the same amount of money from my father that my sibling has and my sibling proposed writing a check directly to me as a transfer of the loan from my father to me. I’ve got a couple questions on this:
Is there potentially any issue with this loan from my father being transferred directly to me from a sibling? It remains a loan from my father but I will not have received the money from my father but from my sibling instead. Is there a certain way this should be recorded so it doesn't look like it was gifted from the family?
I’ve never bought a home with cash before. Is there anything I’ll have to do to get financially “pre-approved’ as a credible buyer when I go for a showing for the house we're interested in? I’ve heard something about getting a statement from your bank that verifies your balance or something like that. Will it be an issue that this money was recently deposited in my checking account (both the inheritance and the loan from my father)?
Any information, insight or anything else I might be missing on this situation that anyone could share would be greatly appreciated.
Thanks.