Is it a good idea to carry the mortgage for a Dr. and her fiance?

Asked by Charlene Eastin, Tucson, AZ Thu Aug 15, 2013

They want to rent in this area, we do not want to be landlords and the house we are selling is brand new, we could carry for a yr or 2.

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Duane Wrobel, Agent, Tucson, AZ
Fri Oct 4, 2013
If you are not a risk taker the answer is no. If you are a risk taker the answer is maybe as you will now become a lender just as a bank is when you carry a mortgage. Many factors can and will affect and/ or influence whether or not you get your money back. Only you can decide if the reward is worth the risk and effort to foreclose if it becomes necessary.
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Ric Mills, Agent, Oro Valley, AZ
Mon Sep 2, 2013
As everyone is saying, this is a very personal; decision. It can effect many things you want to do in that time period. Taking care of the home can be left to a property manager, but i recommend you talk to your attorney and accountant as there are other factors to consider. It can be a nice arrangements or a disaster, you just never know. If the home is priced right in today's market it should sell in under 75 days and then you have no worries.
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Kat Tyree, Agent, Tucson, AZ
Mon Aug 26, 2013
That is a very personal question that involves direct answers from the couple you are considering being the lender for, in addition to your own needs for a quicker cash out. This is primarily a sellers market now in Tucson - is there some reason you would want to do this as a personal favor? If so, that would outweigh the fact that there may be many other currently qualified buyers for your home.
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Roswell Moore…, Mortgage Broker Or Lender, Scottsdale, AZ
Thu Aug 15, 2013
Hi Charlene,

An important question to ask the good Doctor is why they think they will not qualify for a loan to finance the purchase of your home (it sounds as if they think they won't qualify, otherwise they would have their financing lined up). Once you find this out, they just may find out they can qualify for a loan with the right lender; not all lenders have the same loan programs.

For example:

-1.If they had a short sale or foreclosure, we have a loan with NO WAITING PERIOD as long as they have 25% of the purchase price as a down payment.

-2. If they had a Chapter 7 Bankruptcy at least 6 months ago, we have a loan program for them.

-3. Also, we will finance a purchase with 3.5% down as long as they have a 580 credit score.

These are just a few of the things we do that are "outside of the box" because we do things other banks won't do. We actually fund quite a few "fallout" loans from other banks/lenders who will not lend to people in these situations. Please feel free to contact me directly if you have any further questions, I'd be glad to help.

All the best,

Roswell Moore, CMPS
Certified Mortgage Planner
480-422-5095 direct

Sun West Mortgage USA, Inc. (FN)
NMLS Company ID: 3277 / Branch ID: 359295
8950 East Raintree Drive, Suite 200, Scottsdale, AZ 85260
NMLS ID 263779

We are a Direct Lender, Mortgage Bank where we originate, process, underwrite, fund, AND SERVICE our loans, in-house, with FHA (starting at a 580 score AND still only 3.5% down), FHA Streamline refinance loans (NO minimum credit score, NO appraisal required), HARP 2.0 - No Appraisal Required to Refinance Underwater Homes, HomePath, Investor Friendly (10 financed properties), VA, VA Refinance loans (NO appraisal required on IRRRL loans), USDA loans, Jumbo loans, Conventional loans, plus, we allow Escrow Hold-Backs!
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Christina Es…, Agent, Tucson, AZ
Thu Aug 15, 2013
This is a great way to make residual income and gain interest on your asset. The most important things to remember are to have the contract reviewed by either a Real Estate Agent or preferably and attorney and to have the account service by a third party. Most escrow companies in Tucson have account servicing.
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Shawn Devoid, Agent, Tucson, AZ
Thu Aug 15, 2013
Good Morning, Charlene,

Both answers below are terrific. I'm wondering why you don't just list it? Perhaps you think you don't have enough equity for a traditional sale, with agents, as the property is new. Or maybe you have a connection with the doctor? Maybe they're not quite ready to buy (need to get married first, possibilities of relocating, etc) and you don't want the hassle of being a landlord.

The danger isn't so much if you carry the mortgage (if they don't pay, you just foreclose, & it's a much easier process for you than it is for banks), but if they don't maintain it properly, you could end up with the same issues as you would as a landlord.

If you really want to give them a year or two in your home, I suggest renting to them with the assistance of a property manager, with the right of first refusal, should you decide you'd like to sell it. That way, you can capitalize on the equity that accrues, the rent money you receive will help free up some of your credit, your home will be well-maintained, & the Doc & her fiancée can enjoy your home.

As this is a "seller's market", you have many choices! As every situation is different, it's difficult to give advice without knowing all the particulars. I welcome you to contact me personally. I would be happy to help you with any questions you may have, no strings attached!

Shawn Devoid
Chartered Real Estate Consultant
Tierra Antigua Realty
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Rob & Cather…, Agent, Tucson, AZ
Thu Aug 15, 2013
Hi Charlene,

I saw your question and I would like to answer it but I have a question. What do you mean by "Carry"? Are you thinking of doing a Lease/Purchase?


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Spirit Messi…, Agent, Tucson, AZ
Thu Aug 15, 2013
Sorry Charlene, pure opinion question. This is a preference question and really, if I were in your shoes I would consult my financial planner, my CPA, and etc. Many people want to sell their house, not rent it out, lease it, and etc. Being a landlord can be a lot of work, I have had many clients try it and turn around and sell it after only a couple of years. My mother was a Realtor and a property manager for nearly 25 years, there is a lot more to it than people realize.

I would suggest you make a list of pros and cons, see what makes the most sense for you and your family. If or when you are going to sell your house, maybe reach out to a couple of the agents that took the time to answer your question.

Best of luck.

Spirit Messingham, PLLC
3rd Generation Full-Time Realtor®
Tierra Antigua Realty
Direct (520) 471-6900
Fax (866) 365-5208
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David Aguilar, , Tucson, AZ
Thu Aug 15, 2013
If they are putting a 20% down and there financials support they can afford the Note it could be a nice cash flow stream for the next couple years. Just make sure they working refinancing you out by the second year.
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Ric Mills, Agent, Oro Valley, AZ
Thu Aug 15, 2013
Make the terms suit your desires. I also recommend talking to an accountant and possibly an attorney if you are going this alone. I would highly recommend you hire a Realtor/Property Manager to do the documents and to watch the property for you. They are also the go between and can make the whole process easier. They will check out the credit worthiness of the people and take care of the details. Hope this helps. Let me know and I can direct you to some good property managers.
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Donna Moulton, Agent, Tucson, AZ
Thu Aug 15, 2013
Hi Charlene,

If they want to rent, selling it to them doesn't seem to be one of your options.

If this couple wants to buy, why would you carry the mortgage? Doctors generally have no problem getting mortgages. If a mortgage lender doesn't have confidence this doctor will pay them, why do you think they will pay you?

Carrying a mortgage is not necessarily any less trouble than being a landlord. You can still have problems collecting the mortgage payments, and you still may have to foreclose.

If you don't want to be a landlord, your options seem to be to sell the house or hire a property manager.


Donna Moulton, ABR, CRS, GRI
Associate Broker
Tierra Antigua Realty
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