Having a Family member hold your mortgage?

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Icon Mini Profile pw160003





Joined: 26 Aug 2008

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Post Posted: Tue Aug 26, 2008 10:54 am    Post subject: Having a Family member hold your mortgage?
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my sons future father in law is very well off and He has offered to give my son and his daughter a mortgage at fixed 6% 30 year term instead of them going to a mortgage company or a bank. He said it would be completely legal and done up with a contract. Do you think my son and future daughter in law should take him up on his offer and is there anything my son should know before doing this, also this would be their first home
Icon Mini Profile jameshogg
jameshogg




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Post Posted: Tue Aug 26, 2008 11:42 pm    Post subject:
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Hi pw,

Welcome to forums.

This looks like an owner financing contract for 30 years. The rate is pretty good I believe. The only think that they should watch out for is a legal contract being drafted by an attorney because after all no third party (lender/broker) is involved here to take care of this issue. Also, ask them to check out the basics of owner financing so that they are aware of what they're going for.

Thanks
Icon Mini Profile helping_user
helping_user




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Post Posted: Wed Aug 27, 2008 2:35 am    Post subject: not owner financing but simple mortgage transaction
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No Jameshogg, the father-in-law is actually offering the funds in the form of a mortgage loan. So, it's not an owner financing contract actually. But more of a mortgage transaction between family members.

Well Pw, I'll suggest that you take help of an attorney in drafting the legal documents of the contract. I don't find any problem with this deal. But frankly speaking, I do feel it's better to take out a loan from a lender who's in the business thereby being aware of all aspects of mortgage transaction.

Thanks.
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