Posted on: 20th Oct, 2008 06:58 pm
buying a home and land with owner financing what happens if owner does...not pay his bank loan on said property
Hi sportsgirl!
Welcome to forums!
If the owner does not pay his loans, the buyer has to assume the loan and pay it off. This is known as Assumption loan.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
If the owner does not pay his loans, the buyer has to assume the loan and pay it off. This is known as Assumption loan.
Feel free to ask if you have further queries.
Sussane
Hi sportsgirl!
If the owner does not pay the bank loan, the bank will foreclose the property. It will be better if the buyer could assume the loan.
Thanks.
If the owner does not pay the bank loan, the bank will foreclose the property. It will be better if the buyer could assume the loan.
Thanks.
Hi Sportsgirl,
Does the bank know that the current owner is into an owner financing transaction? It is quite likely that the bank may call the loan due immediately. Just check out the loan doc about any penalty being mentioned in case any other other transaction is carried out on the property.
If the owner doesn't pay the bank loan, well then, the bank may foreclose and then more than the current owner, the buyer will be at risk because he'll lose the property. I'd like to ask you, have you already signed the documents for owner financing? Just see that the the bank is informed of such a transaction.
Good luck
Does the bank know that the current owner is into an owner financing transaction? It is quite likely that the bank may call the loan due immediately. Just check out the loan doc about any penalty being mentioned in case any other other transaction is carried out on the property.
If the owner doesn't pay the bank loan, well then, the bank may foreclose and then more than the current owner, the buyer will be at risk because he'll lose the property. I'd like to ask you, have you already signed the documents for owner financing? Just see that the the bank is informed of such a transaction.
Good luck
I got my self into a mess with owner financing. owners owed bank 5 years longer then our contract stated for me to pay them. Thus more was owed then they agreed to sell it for. The bank said loan WAS NOT ASSUMABLE- so if I continued to pay them I needed alot more legal paperwork that still may not help in the end. If the sellers decided they were done with house I would lose my house, money invested and everything. Did I mention the large downpayment to the owners I would be out. I found all this out the week I was to pay the downpayment after I got suspicious and scared. IF they have a mortgage run.... either way have a exceptional lawyer
If you haven't yet given the downpayment, I would suggest you not to go for the property. There are chances that you may fall into trouble later on.
we want to buy this house, the current owner has just been put in jail for illegal business practices. I know the house will be going to foreclosure. How can I find out what lender the current owner has the loan with? and if I do find the bank, can I offer to buy the house from the bank for what is owed on the ?
Hi kkymm,
This issue has been discussed on the following page:
http://www.mortgagefit.com/foreclosure/buyhouse-lender.html#95222
This issue has been discussed on the following page:
http://www.mortgagefit.com/foreclosure/buyhouse-lender.html#95222
I am trying to sell a mobile home on a lot. I am willing to owner finance, can I owner finance if I still owe on the property and put the first person as first lein holder and me as second lein holder?
Hi Sheila,
If you go for a seller carry back mortgage, you can carry a second lien on the property and help the buyer in purchasing the home. But in case of a default by the buyer, you will be paid last as you are the second lien holder. In that case, the first lien holder would be paid first and if there remains any extra money, you will get that. This is why it is important that you check your buyer's credit thoroughly before you go for owner financing.
Thanks,
Jerry
If you go for a seller carry back mortgage, you can carry a second lien on the property and help the buyer in purchasing the home. But in case of a default by the buyer, you will be paid last as you are the second lien holder. In that case, the first lien holder would be paid first and if there remains any extra money, you will get that. This is why it is important that you check your buyer's credit thoroughly before you go for owner financing.
Thanks,
Jerry
on a house that is 250000. owner finace at 7% interest for 30 years what would my payments be with 75000. down
Hi kdz,
Using the FRM calculator, what I found was that your monthly payment would be around $ 1663.26. You can use the given calculator in order to find your monthly payments:
http://www.mortgagefit.com/calculators/simple.html
Using the FRM calculator, what I found was that your monthly payment would be around $ 1663.26. You can use the given calculator in order to find your monthly payments:
http://www.mortgagefit.com/calculators/simple.html
It is other way around, they pay you full amount you pay Mortgage company 323.00
A simple way i see many investors go about this is to have the debt serviced through a company for a small monthly cost of $20-40 or so paid by buyer or seller. the servicer will collect payment, pay the debt, as well as owner(s). Statements can be made available for both buyer and seller to review if they choose.
KDZ70: on a house that is 250000. owner finace at 7% interest for 30 years what would my payments be with 75000. down
Here's how you calculate this, quite simple once you learn.. If the property is free and clear and the buyer is Not "taking over" a 1st lien, would look as follows:
250,000 Price
- 75,000 Down payment
--------
175,000 @ 7% = approx 1020/mo
computing interest only: 175,000 x 7% = 12,250 / yr
12,250 / 12months = 1020/mo
Here's how you calculate this, quite simple once you learn.. If the property is free and clear and the buyer is Not "taking over" a 1st lien, would look as follows:
250,000 Price
- 75,000 Down payment
--------
175,000 @ 7% = approx 1020/mo
computing interest only: 175,000 x 7% = 12,250 / yr
12,250 / 12months = 1020/mo
we want to buy this house, the current owner has just been put in jail for illegal business practices. I know the house will be going to foreclosure. How can I find out what lender the current owner has the loan with? and if I do find the bank, can I offer to buy the house from the bank for what is owed on the ?
No, the bank is not the owner of the property. The note holder cannot sell the owners home based on a default yet alone potential future default. You have to go to the owner or whomever has appropriate rights to sell on owners behalf. If the owner is motivated to sell i will share my opinion on how you can approach.
[Email address deleted as per forum rules. Thanks.]
No, the bank is not the owner of the property. The note holder cannot sell the owners home based on a default yet alone potential future default. You have to go to the owner or whomever has appropriate rights to sell on owners behalf. If the owner is motivated to sell i will share my opinion on how you can approach.
[Email address deleted as per forum rules. Thanks.]