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Hi. A family member recently purchased another home and relocated (to another state) she would like for me to own her home here in florida. But, my credit rating won't support the financing, even though my income more than cover it. Shoulc she quit claim the property to me w/an addendum that i will be responsible for the mortgage, taxes and insurance and I later apply for financing or refinancing as my rating improves? Or is it better, or even an option, to just place me on the deed and I then take over the payments, etc?

jameswells · Posted: Sun Nov 11, 2007 2:33 pm Post subject:

Your best bet for both parties is to do a land contract. A legally binding agreement that you buy the house and pay her, she can then pay the mortgage. Once you fullfill the terms of the agreement- either payoff, refi, etc. then you get the deed to the property. You can work out the details of insurance and property taxes in the document as well. Understand though, many mortgages have a "Due on Sale Clause", meaning if the property is sold, they want payment in full. Although, the mortgage company likely won't know or care unless the payments aren't made.

I strongly advice against a quit claim deed. If you read some of the forum posts here, you will see why. As the buyer, you don't have much to lose, but the seller is giving up the property rights and is still obligated for the mortgage, and it's creates a real headache in a lot of cases.

jameswells · Posted: Sun Nov 11, 2007 2:35 pm Post subject:

An added note- get an attorney involved. You can lose out in a land contract situation if the owner takes your money and doesn't pay the mortgage. The lender will foreclose and you will be out the money you paid... as you can see, there are several legal pitfalls- please contact and attorney.

sara · Posted: Mon Nov 12, 2007 8:04 am Post subject: RE: quitclaim or buy property?

Hi Cee cee,

I guess getting the property quitclaimed to you is ok but that will not relieve the family member from the mortgage debt. For that, you will have to refinance the loan in your name or else if the lender agrees for a novation (transferring a loan), then that migt be ok for you.

What I persoanlly feel is, you and the member should talk to the lender openly and let the property be quitclaimed to you. Then try to improve your score while the member makes the payments (if she isn't willing to do so, you might make payments but in her name as you are not able to refinance) till you refinance.

Take Care

jenkin7 · Posted: Tue Nov 13, 2007 6:00 am Post subject:

Hello Cee Cee,

Have you spoken to the lender and tried to refinance? What is your credit score at present?

There are lenders who sometimes consider your alternative score to approve you. You will get more information on these scores here http://www.mortgagefit.com/credit-rating/alternative-creditscores.html

You may have to shop for a while and get the best offer.

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