Financing in 94585>Question Details

macdovegrl, Home Owner in Suisun City, CA

my renter wants to buy my home but is not quilfyed for the entire amount of my morgage, can he take over my payments legaly, all payments are current

Asked by macdovegrl, Suisun City, CA Tue Nov 6, 2012

0 votes Share Flag Financing in 94585

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Yes there are creative finance options, but you need to do it correctly, you can have some real ramifications if not done right. As the seller are often held liable for any borrower defaults.

I would have to ask though if the property will appraise for the purchase price?

I get a lot of people financed who were turned down elsewhere. Have them contact me, there is not cost or obligation for them.
0 votes Thank Flag Link Tue May 7, 2013
I agree with Carl, but the sticking point is that the tenant doesn't currently qualify to take over your loan. An alternate solution is a lease-to-own scenario, in which the tenant pays extra on the rent for a period of time and then may exercise an option to purchase the property up until some point in the future. In situations like yours, the exta amount paid on the rent is used to pay down the mortgage until it is low enough for the tenant to either assume the existing loan or qualify for a replacement loan. There are 2 major issues with lease options 1) few ever close for several different reasons and 2) it's hard to select a purchase price for the a point in the future. If the value of your house goes up in 2 years, you'll want a higher price at that point. If it goes down, the tenant will want to pay less. The solution is usually to pick an agreeable current value and tie the option price to that value as adjusted by a housing market index. Kind of complicated and not for most sellers.
0 votes Thank Flag Link Tue Nov 6, 2012
The only "legal" correct way is for the buyer to obtain a formal assumption from your current lender. Which would entail qualifying for the loan, but as you stated he doesn't. You can seek the advice of an attorney and explore a wrap around mortgage, a form of owner carry. This comes with risk for both you and the buyer, so seek legal advice! The lender could call the loan due in this type of transaction.
0 votes Thank Flag Link Tue Nov 6, 2012
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