Owner Financing Help For New Guy
Im looking at a property that i would like to propose owner financing to the seller or take a lease/purchase. I only understand it a little. The only thing is could i or should i sugest he refinance so that there would be a better rate for the loan. Hes 15 years into a 30 year at 7.5% for $72000. I would rather lease/purchace option the property but at his mortgage payment right now ($850) i wouldnt have enough to pay him more and make cosmetic repairs. What should i do?
Well you could have him refinance to lower the rate, but depending on his credit it might not be that much, depending on if he could get OO financing or not.
What is the FMV of the home and what are you offering?
One point is that he is almost through the loan so that any payments that are made are knocking down the loan balance at a pretty good clip instead of being mostly interest, as a new loan would be.
Try to find out what he wants to do with the cash from the sale of the home. You may be able to talk him into refinancing the home to get cash and then letting you take the property sub2, but remember there will be costs for him involved and I am not sure the rate will change all that much.
Thanks,
Fmv is about 70000. Its listed for 79900. Im excluded from having to deal with the realator. I dont think it will sell for that much. He told me he just wants to break even on the house. 72000. I would be willing to ofer more if he can get me in there.Also he wouldnt have to do any work on the place.
His sister was in it for the last 10 years and trashed it. She had the intention to buy it eventualy but she had to move away.
This guy dosnt want to do anything to fix up the house or even clean it to show people.
I'd suggest you try to structure the purchase such that he gives you a wrap mortgage for the property - basically you'll make the payment that a 30yr at 8% (negotiate less if you can) amortized loan would require. He'd keep whatever was paid in addition to his monthly payment - and at the end of 15 years he would keep all of your payment .
If he just wants to "break even" you picking up the obligation is certainly worth something to him. After 12 consecutively made ontime payments, you'll have a good case for a refi where you could payoff the loan and possible get back some of the money you'd put into making the repairs.
My advise is to structure the offer by what you can do - if he is motivated he will help you accomplish this one.
FMV = $70,000
mortgage balance = $72,000
Perhaps I'm missing something, but why would you want to pay more than FMV?
what would the FMV be if it was fixed you mentioned it was trashed
[addsig]
15 years ago the balance was 72000.
Its obviously less than that now.
this sounds familiar...this place is not in Maryland, is it?
What type of loan? If it is an fha he can streamline refi quickly.