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lisascherzer
Joined: 04 Jan 2008
Posts: 575
66.11 Dollars($)
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 Posted: Mon Jan 07, 2008 9:48 pm Post subject: |
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Lease to purchase or a land contract would be options to for the buyer to purchase this home.
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Lisa Scherzer
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santos
Guest
0.10 Dollars($)
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| Posted: Mon Jan 21, 2008 8:54 am Post subject: owner financing |
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| If you hold a first mortgage on a property can you still owner finance for 100% of the first mortgage as a second to a propective buyer???I.E. be the middle man for the bank |
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Samantha
Moderator
Joined: 16 Sep 2005
Posts: 1441
Location: MASSACHUSETTS
118.98 Dollars($)
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| Posted: Tue Jan 22, 2008 1:11 am Post subject: RE: owner financing as second lien |
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Santos,
What I can understand from your query is,
You have a home with a mortgage on it and wish to sell it off. The buyer will not assume the loan but consider it as owner financing - that is, you will be paying for the loan with the funds paid by him every month as a part of the owner financing deal. Thus, the owner financing will act as a second lien on your property.
However, I doubt whether your lender will allow for it. This is because when you sell off the home, either you are expected to pay off the loan or else let the buyer assume the loan with the approval of the lender. And, it is better not to hide the owner financing deal, as the lender can charge you a penalty if he comes to know of it because he has invested into the property and he hasn't received the entire payment yet.
Moreover, if your loan contract has a due on sale clause, then the lender might immediately ask for the entire balance once you sell off the property.
Please let me know if that's what you have asked for.
May God bless you.
Samantha
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livinginnky
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Joined: 08 Sep 2007
Posts: 596
23.69 Dollars($)
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| Posted: Tue Jan 22, 2008 11:07 am Post subject: |
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Hello everyone,
There is a simple solution to this problem. The easiest way to accomplish this would be with a rent to buy. The buyer would simply sign a lease just like a standard rental agreement would look. In addition you would attach an addendum which states that on such and such a date and for this much money A. will buy property from B. That way everyone is protected and nobody runs the risk of losing seriously. There are obviously still risks but this way the original lender can't call a "due on sale" clause. And the new buyer has a legitimate stake in the purchase (if he/she can qualify through a lender). You can still put money down or structure the purchase how you see fit.
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Eric Matthews
Mortgage Refinance and Home Loan Guide |
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Samantha
Moderator
Joined: 16 Sep 2005
Posts: 1441
Location: MASSACHUSETTS
118.98 Dollars($)
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| Posted: Wed Jan 23, 2008 3:29 am Post subject: RE: owner financing as second lien or simple rent to buy |
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Thanks Eric. It is indeed a good way to avoid risks on account of the due and sale clause. Instead of having a second lien, it is better to go by this method. Thre best thing is, it offer protection to all parties involved in the transaction.
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livinginnky
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Joined: 08 Sep 2007
Posts: 596
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| Posted: Fri Jan 25, 2008 9:46 am Post subject: |
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I should add that local laws will have something to do with the determined agreements as well. Rent to buy as I have shown is not legal everywhere, just like lease options and land contracts. Different local laws can have an effect on what financial tools you use. Just wanted to throw that in, but not wanting to complicate the matter. Oops, Looks like I just did. So with that said it is always a good idea to consult with a reputable local attorney.
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Eric Matthews
Mortgage Refinance and Home Loan Guide |
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confused
Guest
0.10 Dollars($)
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| Posted: Tue Feb 12, 2008 7:11 pm Post subject: owner financing |
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| I am buying some acreage from the seller and he is financing. Can he ask for payments to begin before we get the land surveyed and have the closing? We signed the purchase contract in November and we were supposed to have the closing in mid December but we could not because the surveyor could not get to us until this February. Now the seller says we forfeited because we did not make a payment in January and another payment is due at the end of this week. The purchase agreement says that interest will accrue starting December 15 and payment begins January 15 and on the 15th of each month after that. Are we supposed to have made payments in Jan. and Feb. even though we have not had a closing? |
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Jessica
Mortgage Mentor
Joined: 08 Jun 2004
Posts: 613
Location: OHIO
97.67 Dollars($)
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| Posted: Wed Feb 13, 2008 3:02 am Post subject: RE: seller financing issues |
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Hi Guest,
Welcome to our community forums.
I think everything should go by the contract. If your contract says payment should begin in January, it should start then only. But does your contract say anything about an upfront payment? may be the seller is asking for an upfront payment in the form of down payment.
However, if the closing is not yet done, then the monthly payments should not start. The seller should have amended the contract then. He can at least ask for the down payment but not the monthly payments. I think you should have a straight talk with him and if he's not willing to listen simply stay out of this contract, if possible or else seek legal advice from an attorney.
Regards,
Jessica.
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GUEST
Guest
0.10 Dollars($)
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| Posted: Fri Mar 28, 2008 2:54 pm Post subject: SELLER FINANCING |
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| I HAVE A QUESTION. IM NEW TO SELER FINANCING AND I HAVE SOMEONE WHO'S INTERESTED IN DOING SELLER FINANCING WITH ME B/C IM NEW TO THE COUNTRY AND DONT HAVE ALOT OF CREDIT. I KNOW THAT THE SELLER OWES MORE ON THE HOUSE THAN WHAT THEY WANT TO SELL IT TO ME FOR. IT SOUNDS LIKE A GREAT DEAL. BUT IM WORRIED AND WONDERING HOW CAN I BE COVERED TO MAKE SURE I OWN THE HOME WITH A CLEAR TITLE OR SOME KIND OF INSURANCE? SO I KNOW NO ONE CAN TAKE THE HOME FROM ME? |
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helping_user
Joined: 31 Mar 2006
Posts: 661
Location: Hawaii
123.27 Dollars($)
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