My husband has some credit issues and the only type of loan we qualify for right now is a 85% conventional loan w/ 9.75 adjustable interest rate. That loan is not an option. We will get back about $10,000 when we sell our house. We have to move because our neighborhood has gotten exemtrely bad. We seen a lot of adversiting for lease/purchases and owner financing. Our concerns is that the owner may not pay the house payments and we get evicted. Or the house is in pre-foreclosure and we don't know it. Any suggestions?
2006-12-04 00:40:49 · 3 answers · asked by BB 2 in Business & Finance ➔ Renting & Real Estate
When you rent a house, you are taking a small risk. A bank may foreclose or the landlord may simply want to sell within a year. Try finding a decent apartment in a good area. Work on fixing your husband's credit. You are right by not taking the loan you were offered. You won't lose much by not buying a house in the next 12 months or more. Good luck.
2006-12-04 04:48:44 · answer #1 · answered by Anonymous · 0⤊ 0⤋
"Lease-purchase", "Lease-option", "Contract for deed", "Owner-wrap", "No bank qualifying" are all catch phases (to catch you). Don't get caught.
A TRUE owner carry or owner financing is OK for you. This would mean that there is no outstanding loan to a mortgage company. When you buy this way, you actually get title to the house and the seller is you lender - they get to place a lien on the property for the amount you owe them.
On the others, you've mentioned ONE of the pitfalls that you could encounter. There are others too.
After your credit is better and you're ready
to refinance into your name, you cannot find
the owner for him to sign it over. Or he
refuses to sign it over - sells to someone
else.
The seller dies (with or without a will) and
you now get to fight heirs for the house.
The seller get's sued, and his "rent house"
gets taken away.
His lender calls the note due immediately
(they have that right, you know) because
he has violated the "Due on Sale" clause.
There are also pitfalls for sellers who get tricked into doing this type of sale. Really, the only parties that regularly do well in this is the Realtor selling the house.
Take a seller (without enough equity to make a real sale) and a buyer (without the means to get a loan). Friendly Realtor steps in to "save the day". Buyer gives 6% down payment (Realtor gets that as his commission), seller moves away (thinks everything's taken care of), buyer moves in and starts making payment to the original lender. Many of these houses end up on the HUD list, others on the VA foreclosure list, and others on the lenders REO lists. ...... but the friendly Realtor got his money.
2006-12-04 11:31:10 · answer #2 · answered by teran_realtor 7 · 0⤊ 0⤋
Flipping houses is a great profession to be in. I currently flip houses for a living, and have had a blast making hundred's of thousands of dollars. The key is to do as much work as you can on your own.
Did you know that you can make $40,000 + on a house, and never even own it?
Take a look at my website - I just put it online last month -
Please realize that Flipping Houses is not a "Get Rich Quick" Scam!
Do as much research as possible before starting on your first flip -
http://www.LearnToFlipHouses.com
Kind Regards and Good Luck!
Adam Monforton
2006-12-04 16:32:38 · answer #3 · answered by p3mofo 2 · 0⤊ 0⤋