I see a lot of ads on craigslist that stated thier house is in preforclosure- take over payments. No credit check and no down payment. Really.. what is the catch to all this?
I would never get in to something like this without consulting with an attorney. It just seems too good to be true!!
Have a house- take over payments and live happily ever after!!
2007-12-29 23:59:40 · 4 answers · asked by christine 2 in Business & Finance ➔ Renting & Real Estate
Not something you want to do. Folks in trouble are looking to avoid foreclosure by simply issuing you a quit claim deed to gain title to the house, and then allowing you to continue making THEIR mortgage payments.
The problem is that taking over someone else's mortgage thusly is not allowed by the lender without approval and refinance. Moreover, Form 1098, which provides evidence of interest paid for tax deduction, goes to the FORMER owner, and YOU cannot deduct it legally from taxes because you are not legally obligated to pay same.
If that's not bad enough, you MAY be taking over a mortgage for more than the house is worth. In other words, it IS too good to be true !
2007-12-30 00:14:13 · answer #1 · answered by acermill 7 · 2⤊ 0⤋
Definitely consult with an attorney. What you are talking about is known in the investing and real estate world as buying a property "subject to the existing mortgage." This is a deal that if I have the money and the situation is right, I'm going to do this deal all day long. I am not going to do it in an area where there are a ton of properties for sale and values are sinking. In exchange for cash to either catch up payments, help the owner to move, or whatever I will get title to the property by way of warranty deed, quit-claim, etc. At that point the responsibility for the mortgage payments is mine, but the option to refinance the property I now own, is also mine. Is the former owner's lender going to call the loan due? They could, but if their money is coming in every month, do you think it matters? Do you know any lenders that are going to spend thousands of dollars to foreclose on a loan that is performing? Do you think there are any children out there that have said to their parent's, " Mom, I know things are tough for you now, deed the property to me, I'll cover all the payments and you can live here as long as you live."
2007-12-30 02:39:31 · answer #2 · answered by Anonymous · 1⤊ 0⤋
Take Over House Payments
2016-10-28 13:08:46 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Christine, the chances are you would have to come up with alot of cash to do this. I don't believe there are many lenders that would allow you to just come in and take over payments without some hefty cash down and PERFECT credit, and cash flow. So I'd say this is some kind of scam.
2007-12-30 00:31:16 · answer #4 · answered by Anonymous · 0⤊ 0⤋
The mortgages may also be assumable (even though most lenders have distanced themselves from assumable loans).
The buyer assumes all the obligations under the mortgage, just as if the loan had been made to him/her. The advantage to this is that you may be able to assume a rate that is lower than the current market.
However, there are also cons with this situation. My advice is to avoid this scenario. Besides, the current rate is probably not that great if the homeowners are going into foreclosure!!!! I hope this helps!
2007-12-30 01:33:07 · answer #5 · answered by I'll Ask the Questions Here 2 · 0⤊ 0⤋