Home Buying in 11784>Question Details

Jenbo, Home Buyer in 11784

My uncle has a house and i want it. he is currently 5 month behind. and i cant get a mortage loan what options do i have to try to get it?

Asked by Jenbo, 11784 Sat Nov 20, 2010

I have a car repo on me from 2 yrs ago. He is 5 months behind. I want to take over his payments but they are a little high for me. what kind of advice can you give me?

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what type of mortgage does your uncle have on the property? If it is an FHA loan, you can assume the mortgage if your uncle is willing to do this and if you can afford it.

You said the payments - you can't afford.

So that's not an option.

Your uncle just can't "deed the house" to you - such a move would trigger what's called the "acceleration clause" in your uncle's mortgage which would "call the loan due" in full, when they found out this occurred.

If you have a car repo on you - you'd have to see about getting that off and have you credit checked. You'll also need low debts and good income with a work history of at least 2 years in the same field/line of work.

If you don't have the above - then getting a mortgage is not possible at this time, unless you can get a private loan - which will be very difficult also and the interest rate will be higher most likely.

Lastly - you, as a relative, cannot buy the home on a short sale, because they require "arms length" (no relation) sales as previously indicated.

Sounds like this is an opportunity that's going to get away from you.

Save up right now, get your credit straight, pay off your debts as much as possible, stay at the same job - and in 24 months, when they foreclose - buy it at the auction steps - THAT'S your best bet at this point. I believe you could get away with the "being related" thing too - when you buy at auction. Or at least there are definite ways to get around that.
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1 vote Thank Flag Link Sat Nov 20, 2010
If you can catch him up to date on payments, then maybe you can work out with him doing a rent with an option to buy. It would buy you time in building your credit and accumulating a down payment. He should contact his lender and find out about a loan modification. If he hasn't already applied for STARS, he should immediately as well as possibly grieving his taxes. Maybe you could afford the payment then. Contact an attorney for the best way to handle the legalities, so both parties are protected. GOOD LUCK!
1 vote Thank Flag Link Sat Nov 20, 2010
First, make sure this house is worth more than the mortgage, and not by a little. Include the cost of immediate and short term repairs.

Would the mortgage payment be similar to what the house would rent for? Not the MOST it MIGHT rent for, but the LEAST it would rent for, AFTER expenses. No need to read on if it does not meet BOTH of these basics. Everyone does this on some level, but don't let rational investment decisions be clouded by what you want, like signing and driving a car above your ability to pay for it.

If your Uncle is willing and able to help you do this, there are ways. IF your current savings and your current income allow you to bring the mortgage up to date, and you can share the house ownership with him legally, then a lawyer can draft an agreement where you go on the deed and then take over until you can refinance, and then remove his name from the deed. Please make sure that this is done with a written contract as you could end up destrying your ability to take in what might be an even better opportunity.
0 votes Thank Flag Link Tue Aug 7, 2012
Easy. (Easiest answer all day for me. Not sure why the previous answers say it's difficult.)

Here's what you do. First, you'll have to be able to make up the late payments. But if you can do that, you've got it made.

You purchase the property "subject to." That is, subject to the existing mortgage. The existing mortgage stays in place. Your uncle deeds the house to you. Now you'll own the house but the mortgage will remain in his name. There's no downpayment. No qualification. No hassles with lenders at all.

You make up the 5 months of late payments. (Borrow some of the money if you have to. Or your uncle probably has some cash, since he hasn't been making payments in 5 months.)

That's it.

You say the payments "are a little high for me." You might rent out a room in the house to cover the difference. Or get a part-time job. Or if your uncle has a few hundred dollars a month, you say to him: "Uncle. I have the solution to your problem. I'll catch you up with the bank. No more letters and phone calls. And we'll be able to rebuild your credit. However, I would like you to pay the taxes--just the taxes--for the next couple of years." It doesn't have to be the taxes. You can ask him to pay the utilities. Or taxes and insurance. Or anything else that'll cover the difference between what you can afford and what the mortgage is. Basically, he chips in the difference.

So: You acquire the home by having your uncle deed it to you. You make up the 5 months of late payments. Then figure out a way to bring in a bit of extra money to cover the difference between what you can afford and what the mortgage is.

Simple.

Hope that helps.
0 votes Thank Flag Link Sat Nov 20, 2010
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
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Most lenders will not consider an offer on a Short Sale that is not an Arm's Length Transaction. Buying from a business partner, neighbor or relative would have to get "special" permission, which is usually not given.
Web Reference: http://topbrainerdagent.com
0 votes Thank Flag Link Sat Nov 20, 2010
Hi Jenbo,

It looks like Loan Modification would be your only chance. The home is still going to be your uncles name. You should start working on building your credit back. This way you will be able to get a mortgage down the line.

Good Luck.
0 votes Thank Flag Link Sat Nov 20, 2010
The first thing your uncle should be doing is to put his house on the market as a short sale (I am assuming he owes more than it is worth). You should speak to a mortgage banker and let them advise you as to any options you may have (perhaps another family member can co-sign for you). The repo makes it tough as I am sure it brought down your credit scores.

Good Luck to you both!

Donna Lomenzo
0 votes Thank Flag Link Sat Nov 20, 2010
I agree with the slim to none answer on getting this house. Work on cleaning up your credit issues and getting in a place where you can purchase a home. Your uncle may do well to contact a REALTOR® who specializes in Short Sales or consider a loan modification. As always, he should be in contact with his lender and try something other that just walking away.
Web Reference: http://topbrainerdagent.com
0 votes Thank Flag Link Sat Nov 20, 2010
There is one "possibility" if the bank offers your uncle a modification. You will need to be authorized by him to speak to the bank on his behalf. If they can extend the terms of the loan or offer you a lower payment that you can afford, you can have an attorney draw up a contractual agreement and add you to the deed.
0 votes Thank Flag Link Sat Nov 20, 2010
Highly unlikely that one would qualify for a loan with a repo--therefore, maybe your uncle should consider a consultation with an attorney who specializes in real estate and see exactly what options both of you may have--if he cannot afford an attorney, try contacting your local Legal Aid Society and or Bar Association for a pro bono attorney--free--or keep in mind that most professionals do offer a free consultation.
0 votes Thank Flag Link Sat Nov 20, 2010
Slim to none - if you can't pay the delinquency and can't get a mortgage, the bank is going to foreclose unless your uncle can modify his original loan.
0 votes Thank Flag Link Sat Nov 20, 2010
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