About To Buy John's Book Just Have 1 Question
Okay you take the house subject 2 and you have the deed. Now can you get an appraisal and get a conventional mortgage on the home right away? Say you take a home subject 2 that owes 100k. Home appraises at 150k. Can you go ahead and refinance in your own name and get a 80% loan (120k) pull out 20k and have a standard 1st mortgage on property? Or is there a seasoning issue. How would a bank respond?
dgtop,
Glad to meet you.
The seasoning issue applies when you buy and sell right away. Since you are buying and the deed is in your name the seasoning issue would not apply.
You are simply re-fianancing a property that is already in your name.
John $Cash$ Locke
I'm pretty sure you could, don't know why you would, but you could.
And who's bank are you questioning, the sellers or yours? The sellers bank has the loan on the property. If your making the payments, they are happy. A new bank wouldn't mind refi. if thats what you want. But If you had a house like that, why not sell it for $160, get 30K, make a spread every month and when your buyer refi, you get another 30K.
If your not living in the house, why would you put it in your name if the seller already agrees to letting it sit in theirs. But if you live in it, pay it off from other deals that you do.
Hello,
If you took the house sub-2, you need to get an agreement to act a power of attornery with the bank concerning the issue of the 1st loan ($100K loan). By the way, the 100K loan IS the 1st, you are referring to taking out a second morgage. You should be able to take out a 2nd immediately, without seasoning. Good luck.
Sam
that's 30K down from your new buyer
Thank you for your replies. The reason I ask is because I am a mortgage broker and can get some pretty good deals on financing. Plus In the scenerio listed above i could take out 20k and do more investments. I just wanted to know if it was an option. Plus it would alleviate the worry that the person who's name is on loan wont screw up your deal by declaring BK or with some crazy lawsuit.
dgtop,
On a sub-2, after you've filed the executed deed, you need not worry about lawsuits against the previous owners or BK.. On the topic of BK it would somehow add some confusion to the situation as the loan and debt is in their name, but in BK mortgages really aren't touched, as in if they continue to be paid they're a-ok..
Their is NO dangers whatsoever after the deed has been recorded!!! These types of dangers ONLY exist prior to a transfer of deed and recording thereof.. As well these worst case scenarios DO happen and can really bite ya in the butt on contract deals like lease/ops and land contracts..
Chris
Question-Isn't this method risky on the part of the original mortage holder. What would happen to original note holder if the subject 2 person defaulted and did not make payments. Isn't their credit at risk. Also, if they are selling don't they want their credit free and clear for another mortgage on their new home?
Trying to understand both sides of the table!
~Chantelle
Quote:
On 2003-10-28 15:53, dgtop wrote:
Thank you for your replies. The reason I ask is because I am a mortgage broker and can get some pretty good deals on financing. Plus In the scenerio listed above i could take out 20k and do more investments. I just wanted to know if it was an option. Plus it would alleviate the worry that the person who's name is on loan wont screw up your deal by declaring BK or with some crazy lawsuit.
While you might be able to get a few deals on the financing end of it, would it not make more sense to leave the 1st mortgage in the other person's name? That way your Debt to income ratio doesn't get hit. Also, you don't have yet Another credit hit on your report.
Just my 2 cents
Derek