If I’m buying an estate home who gets the extra money when I borrow more money than what the house is selling for?
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If I’m buying an estate home who gets the extra money when I borrow more money than what the house is selling for?
I’m buying mother-in-law’s house. The executor is selling it to me but the money will get split 4 ways to children. There will be extra money, does that come to me?
Asked on October 17, 2018 under Estate Planning, New Jersey
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
If you get a loan for more than you need, you would keep the surplus (but of course, you have to repay it as per the terms of the loan, with interest presumably--you are likely better off borrowing less and not have a surplus you have to repay with interest). The estate has nothing to do with the transaction between you and your lender. The estate gets only the money paid to the estate for the house, which is then divided among the heirs. So (example) if you get a loan for $250k but pay the estate $225, the other $25k goes to you, subject to the terms of the loan.
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