Walking A Mortgage
I have been thinking about starting a business one day. I heard about this Walking a Mortgage idea in a book that i am reading. Do you think it is a good idea to get a loan from the bank and buy a house for sale by owner for $90,000 and then list it with a realitor for $100,000. Of course the house would have to be underpriced by the original owner. THen I would settle for 95,000 and the realitor and the closing costs would cover the the extra 5,000. So then I would take the $90,000 and instead of paying the bank the lump sum of $90,000 I would keep paying on the monthly bill. I would use the $90,000 to start a business. I think the bank would be more likely to give me a low interest loan on a house then on a business. What do you think?
Who ever wrote that should get off the crack
Can you elaborate instead of just saying its a bad idea?
When you close with your 2nd seller,your mortgage would be due, leaving you with $5k that would get ate up in mortgage and holding costs. You would most likely lose money on the deal.
Not to mention the seasoning issues would deal with. Besides, who pays full price on a house anyways.
so is it some sort of law that the mortgage is due when you sell the house? I read the idea of Walking the Mortgage when I read the Book Fortune at Your Feet by A.D. Kessler. Did I misunderstand what Walking the Mortgage means in the book? Can anyone tell me what Walking the Mortgage means? Thanks
OK not to sound "Non Creative", just factual
I'm not sure how the Walking Mortgage that you're reading about works, but lenders include a due on sale clause in the loan docs that you sign at ****Must Reach Freshman Investor status before posting URL's***he days of the assumable mortgage stopped in 1988 (except for some older FHA notes and some VA loans) Every property I've bought or refinanced, the old lender gets paid off through escrow because they have an lien/interest in the property.. Think about it, if you (as the bank) lent me $95,000 dollars wouldn't you make sure the note was secured against the property so you could legally foreclose if the payments weren't made? I'm wondering if the book you are reading is possibly talking about pledged or substitution of equity in which the existing mortgage remains intact but you use or swap another piece of property as the collateral. Either way the bank will protect their interest, and doesn't ususally let people walk away with their money to do what they wish with it.
Once again, this is not to say it can't be done, but just to inform in case you haven't been there before.