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Greg, Home Buyer in Marietta, GA

Where do I find a take over payments home?

Asked by Greg, Marietta, GA Tue Sep 16, 2008

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Hi Greg,

Matt summed it up pretty well, other than the very occasional owner financed option actually assuming a loan is infrequent at best. Over the 20 years real estate has changed and the idea of borrowing as much as possible (often more that you can afford) has become the norm. Owner held paper places some risk on the owner, they have to deal with any payment problems and most have no time for that even if they could do it. An assumption (as you describe) if available in this market would require you to "qualify" anyway as the lender would then be expecting you to meet the obligation. Most loans are no longer assumable and the few that are may require the original borrower to remain on the note. Unless they get a release, this will then remain as a debt which might preclude them from obtaining a new loan.

This economic disaster was caused in large part due to the lack of control by many buyers - they overextended and were fiscally irresponsible. Historically money is still cheap - you just need to actually be able to qualify now. If I can help, let me know - I have an awesome mortgage rep that will be happy to answer any questions.

Hank Miller, SRA, ABR
Associate Broker & Certified Appraiser
REMAX Greater Atlanta
678-428-8276
5 votes Thank Flag Link Wed Sep 17, 2008
I think what you are referring to is what is called an assumable mortgage. Assumable mortgages are mostly a thing of the past and haven't been used for many years. Most if not all loans written in the past 10 years or so are not assumable; so they must be paid off by the seller in order to get clear title to the property and then a new loan needs to be taken out by the buyer to pay for the home. What is your reason for interest in this. Interest rates are low now; so I can only assume that you're thinking that you might be able to get a home even if you can't qualify for a loan if you just take over an existing loan from a seller. If that's the case, another way to do something like that is via owner financing. That would be a case where a seller would actually act as a lender and literally lend you the money to buy their home. Feel free to contact me if you'd like more information on that.
2 votes Thank Flag Link Tue Sep 16, 2008
Greg,

I agree with Hank if you are talking about assumable mortgages, however you may be referring to buying a home "subject to". That is a method that is written about quite a bit in many real estate investing books. Basically you find an owner of a property who is willing to let you "take over the payments" on the house and you move in. While I don't believe this is technically illegal it certainly would violate the terms of the owner's mortgage. In the event the lender on the property found out about a "subject to" transaction, they would most certainly utilize their rights to call the entire loan balance due and payable.

That being said, I know several investors who have utilized this method to acquire homes - normally from individuals who are anxious and financially strapped. If you are interested in this method, I highly recommend going to your local bookstore and researching it thoroughly - there are a lot of pitfalls to avoid.

Scott G. Mills, Esq.
Wilson & Mills, LLC
770-874-1988
1 vote Thank Flag Link Mon Oct 27, 2008
I actually did this and it was the best financial thing I ever did. In 1997 I found a place that was rented out and the owners were sick and tired of their rotten tenants. I gave the owner $4000 and started making payments. I did NOT assume the loan. The loan stayed in the original owner's name. I did however, take title to the property. I made the payment on time each month. People who have not done this all say the lender will call the loan. They could. However, consider that the loan I took over was at 10% and it was 13 years into the loan and the property was distressed....what bank would want to let go of a 10% interest loan with regular payments? Consider today that banks have so much inventory to deal with, and property is going down in value....do you really think they have the time or inclination to call the loan when someone is making the payments on time? NO.

In my case, I moved in. The way I looked at it, I needed a place to live. The worst I would be out was my $4000 as I would have had to pay rent anyway and the mortgage I took over was way less than the going rate for rents in the area.

If you can find people who have actually done this, I think you will find they are all very happy. I use the word ALL because I believe loans are hardly ever called under these circumstances. You have to weight the risks and rewards. I am currently looking for another property I can do this with. I am looking in blue collar areas. This time I hope to put down less than $4000! Last time it took me 9 months to find the deal.

That's my story.
0 votes Thank Flag Link Sat Jan 24, 2009
Can you be a little more specific please so that I might better answer your question for you. Are you asking to take over a loan payment for someone? You would have to qualify and refinance the loan to be able to do this. Please advise me specifics.
Thank you

Tori Lawson
Prudential Georgia Realty
Web Reference: http://www.torilawson.com
0 votes Thank Flag Link Tue Sep 16, 2008
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