OfflineI have a seller who wants to get her payoff out of their house. they are moving into a larger house and they cannot have 2 houses in their name. Therefore, they cannot do an owner finance or lease option. Their payoff is $99K and the FMV is $105,000. Would the best scenario be to do a subject to and then quit claim to the buyer's name? Would I have to find out if the mortgage is transferable first? Any help would be much appreciated!!
Shirley
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Shirley,
If they owe $99,000 and the property is only worth $105,000 there is not a lot of spread there. Also, if sounds like the seller would need to sell-get the mortgage out of their name to qualify for their new home. If they sell subject too, the loan is still in their name. You may be able to do a lease option and assign to the end buyer for a fee (like a wholesale) not enough spread to hold this one. If the seller can show the bank they have rent income from the other property they may be able to qualify for their new loan for their new home.
Good luck
John and Julie Wakefield
JCW Properties, LLC
I know it would still be in their name, but couldn't they quit claim it to the end buyer? How does that work?
shirley
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
Shirley,
you have to check with the bank to find out if the loan is assumable-usually there is a clause in the mortgage documents stating if it is...
Below is a link to an article on assuming a mortgage and transferring the deed to new renters (buyers); it may help...
http://www.bankrate.com/finance/mortgages/will-assumable-mortgage-solve-...
Valerie
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Shirley,
It has been years since many mortgages have been assumable. There are a few out there, but they are very few. I would be surprised if you found this loan to be assumable.
The problem is that there really is not a lot of room for them to maintain the old house and new house. Rents can be used to offset expenses. A lot will depend on how the bank looks at the owner making his home a rental.
With no wiggle room for an investor this house does not com across as a way to make decent money at this time. A mark of a smart investor is also knowing when a deal should be walked away from.
Roy Voeks
Official RE Coach
You're right. I've looked at all the possibilities but none seem to be the answer. I hate for them to be foreclosed on, but obviously there is nothing I can do.
thanks,
Shirley
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
If they are going to be Forclosed on thats a different story!
Have them contact the Bank for a loan modification.
Also why they are on the phone ask the bank if they would accept a Short Sale?
Good Luck!
Jay C
Jay C