Someone on here was talking about renting some place for a year then wanting to purchase it.
They said since they could prove they'd been making the mortgage payments for a year, they could refinance the current owners mortgage instead of applying for a new loan.
Is this true? If so, what are the benefits to doing that, if any?
2007-09-18 05:05:15 · 5 answers · asked by Roland'sMommy 6 in Business & Finance ➔ Renting & Real Estate
What you're talking about is a land contract AKA "contract for deed"...depending on your state, it's called different things.
It's basically like the previous owner is your bank, you're making monthly payments to them and if you can show 12 months of paying on time, and the land contract is recorded with the county, some lenders treat this as a refinance rather than a purchase. You'll need to talk to a mortgage broker about it, a bank probably won't be able to help you.
2007-09-18 06:12:35 · answer #1 · answered by benebuck8 2 · 0⤊ 0⤋
Basically you're asking about rent to own properties, meaning someone agrees to rent the property for a certain period of time after which they have the option to buy the home from the owner. This is not a refi because only the owner can do that since in today's world assumable mortgages are rare. What would happen is the owner would sell the property to the renter at a discounted amount of money, normally the value of the home minus the portion of the rent that went towards the mortgage, because part of the rent would have also gone to taxes, insurance, and income to the landlord. i hope that helps, this can be kind of confusing.
2007-09-18 12:39:44 · answer #2 · answered by lepr0kan 5 · 0⤊ 0⤋
NO, They will need a min. of 2 years w/ proof of payment paid on time. And the rent cannot be used as credit towards down Pmt. unless it can be prov-en the renter is paying an amt. monthly that exceeds the rent paid for the same type property in that area. And NO one can re-finance another parties mortgage. Hope this helps, Good Luck!
2007-09-18 12:21:44 · answer #3 · answered by diesel6999999 3 · 0⤊ 0⤋
in todays housing/bank matrket. paying rent on someones house isn't making the payments. it is just renting.
as for refi current owners mort - don't hold ur breath.
sale of a house voids most mortgages.
balance due on sale.
new owner buys with new mortgage.
2007-09-18 12:15:25 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Refi would mean the original borrows name is still on the mortgage , and only he can do that .
New loan would mean the the renter / want - to - be owner's name would be on the documents .
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2007-09-18 12:12:49 · answer #5 · answered by kate 7 · 0⤊ 0⤋