Benefits To The Seller
I finally got my head around the fact that buying a prop Subject 2 really helps out the seller. I was making a list of the BENEFITS to a seller in selling his property Sub 2. Here is what I came up with. Any feedback/criticism/comments, etc.. would be appreciated.
1. He has a chance to avoid forclosure
2. With someone making the payments, he/she can save a portion of their credit.
3. Get some money up front. Either small amount (U-Haul) or if they need a larger amount (Discount the note).
4. This point I'm not sure about, but if the seller wants to buy another house, can't they use the fact that someone else is making the payments to get that monthly mortgage obligation off of their report. So the can qualify with the lender?
Again, I may be staing a lot of the obvious, but as many of you know this site is not only good for questions, but also as a sounding board. THANKS
paulmarz,
Point 4 is a little sketchy. I am not sure I would use it, as the individual is still financially responsible for the loan you sub-to and that loan, in the case of a pre-foreclosure, had some negative marks. The rest of your list looks pretty good. You also can provide them more of their equity because they are selling the property through a lender.
[addsig]
TIm,
Thanks that makes sense. I appreciate it.
Paul
If in pre-foreclosure (or not, for that matter), other benefits include possible lighting-fast, low paperwork close, few or no closing costs, appraisals, inspections, etc., no Realtor commissions or paperwork to endure (just yours), and they can avoid talking to the banker anymore.
Re #4: It won't be removed from the credit report, but some MTG companies can offset the liability with the pmt to negate it when calculating DTI
In order to not count that payment against their debt, a history of someone else making the paymt would have to be established, typically 6 months.
Bob,
Thanks. That is exactly what I was talking about. I used to be a Mtg. Banker & knew there was something to be done about that.