Subject To: Back End
Hi everyone!
This is my first posting here, I've been lurking and reading a lot of the old posts. I've learned a ton about subject to from here and look forward to learning more. I'm soon going to purchase John Locke's subject to manual, it sounds like a good one.
One question burning in my mind, I understand subject to deals in general and it is clear to me that the back end money in a deal where you sell to a nonqualifying buyer is contingent upon the new buyer obtaining financing at some point that you specify, then paying your slightly inflated price, you paying the original mortgage and pocketing the difference.
My questions are: what changes in the two or three years that the nonqualifying buyer now can get a loan? Their mortgage payments are not being reported to any credit agency, are they? (since the original homeowner is on the mortgage).
What are the options if the buyer of the home doesn't qualify for a mortgage?
-- SCW[ Edited by junkmail914 on Date 01/21/2004 ]
We set up a system to help us qualify people easier. This does not always work but we stress that if you follow our program you can get the house.
1. When you get into our house you must get a secured credit card or some form of revolving credit. low limits 250-500
2. After the down payment is paid and they have had 6 months with some form of credit, we hand them to my credit cleaning guy. He just disputes everything and works quite well.
3. This entire time we have my mortgage guy pulling credit on these poeple every 3 months. He knows he will be closing so he stays on top of this well.
Does it always work No, but we do have a good success rate sofar..
Sire
PS There are many mortgage programs if you show cancelled checks for timely payments of you t/b it is a refi and its a little easier.[ Edited by sire on Date 01/21/2004 ]
sire had some great suggestions for getting those buyers qualified.
The nice thing about credit is that even if it is bad, it can be good in just a short time. Just start paying your bills, try to get a couple of new accounts that can have a totally satisfactory history, open that savings and just put SOMETHING in there every month, etc. and presto, in a year or 2, you have decent credit.
You CAN report both good and bad credit to the reporting agencies, you just have to know the steps involved.
And the really nice thing about sub2? If your buyers never can qualify, you can finance them since the long term financing is already in place.
WilliamGA
William Tingle