She doesn't have enough money saved for a downpayment, so would have to get a bank loan. After that is payed off, she could start paying me again. How much on a 175k house?
2007-07-18 18:42:25 · 7 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
Some advice don't take your cousin's word that she will make payments to you that usually doesn't work out. I loaned my both my brother a $1000/00 and my sister $7000.00 and they both said they would make payments until they paid off what I loaned them here we are 2 years later from my brother and nothing and its been 5 years for my sister and nothing from her. So I would go through the bank or an attorney cause 175,000 is too much to never see that money again. I myself will never loan anyone any more money unless its in writing that they have signed and I have signed that way you can always sue them and have proof and hopefully after suing them that you then get the money that you loaned them. Good Luck on your finances
2007-07-18 18:54:36 · answer #1 · answered by Anonymous · 1⤊ 0⤋
I think you are saying that your cousin does not have enough money saved for a downpayment on the house he/she is buying from you.
Now you cousin will be getting a bank or lender loan. You should consider going to a mortgage broker for this type loan.
Since your cousin will not get a 100% loan from the lender you want to carry the additional amount for him/her.
That is perfectly ok it is called a seller carry back 2nd mortgage and is a common transaction. You may carry a note of anywhere from 10% to as much as you want.
What ever amount you carry the lender will want to know the amount, terms(# of years) and interest rate. This will go into determining debt ratio. That is why it is better to find a local mortgage broker, they have underwriters that understand these type transactions and programs designed especially for them.
Now the way you structure this 2nd mortgage that you will be carrying will determine how much this cousin will pay you each month. You will have to determine the amount of interest you will be charging your cousin.
You may have an interest only mortgage where your cousin only pay the interest on the mortgage. The term can be for 30 years all due and payable in 5 years.
You may also have the loan no payment due, all interest and principal due in 5 years.
You may have interest and principal payment, where the terms are 30 years, due in 5 years.
Your due date on the mortgage can be 10 or 15 years also.
Your escrow or closing agent should be able to draw this docucment up for you and your cousin signatures and have it recorded at the time of closing with the title company.
I hope this has been of some use to you, good luck.
"FIGHT ON"
2007-07-19 02:07:51 · answer #2 · answered by loanmasterone 7 · 0⤊ 0⤋
if you want good solid advise on what to do when financing your family.. check out this website
www.daveramsey.com
I promise you will be glad you checked this out.. or will wish you had. Dave Ramsey has a talk show about financial peace and what you have to do to get to that peace. You can listen to his show online, or download his podcasts.
I won't tell you what I think Dave will tell you, because every situation is different, but I'm sure it will make you consider some things you may not have before.
If you go thru with this.. 7 1/2 percent to 8 is decent. more could be gotten with the way the market has been going. Just ask yourself this.. would you rather repo a home from a family member.. or a stranger you had a legal and binding agreement with? The later is much easier.
if her credit is ok.. they should be able to give her an 80/20 loan. the 20 percent down will be a higher percent second mortgage, and the 80 will be the average rate over 30 years. Often the second mortgage will be due within 15 to 20 years. If the 80percent is at 6.0 interest.. then the 20 will be apx 7.5%.
remember always, a fool and his money are soon parted. Pray for wisdom, be humble enough to listen, be courageous enough to follow through with the answer. God Bless
2007-07-19 02:00:40 · answer #3 · answered by JB 2 · 0⤊ 1⤋
is this a private sale through you or is she getting financing for the house?
if it is a private sale....do not treat this transaction any differently than a bank would. currently traditional loans are 20% down, 30 year fixed -no prepay penalty....can she do this?
if not...you may want to look into other buyers...you would certainly hate to foreclose on a relative.
good luck
2007-07-19 02:06:21 · answer #4 · answered by Blue October 6 · 0⤊ 0⤋
NEVER....EVER....treat a cousin or any other relative differently than you would a non-related or unknown buyer.
You are talking $175,000 which is a very substantial amount of money. If you wish to give her a break on purchase price because of your relationship, that is fine. But when it comes to agreements to purchase and pay, stick to your guns.
You will NOT be sorry that you did.
2007-07-19 01:48:59 · answer #5 · answered by acermill 7 · 3⤊ 0⤋
I hope you don't like her very much, you wont after she destroys your house and you have to kick her out.
Did you run her credit?
Has she ever been evicted?
Why does she want to buy from you?
There are 100's of houses for sale, no one else will accept her and she is probably lying to you.
2007-07-19 01:57:20 · answer #6 · answered by Anonymous · 1⤊ 0⤋
you should transact the sale through an attorney not directly with your cousin
2007-07-19 01:46:45 · answer #7 · answered by Anonymous · 2⤊ 0⤋