Contract Amount Not Enough To Cover Principal Balance And Additional Interest
What happens if the contract amount is not enough to cover the principle balance and the interest? Does the contract not go through because the first lien holder does not allow it? Thanks!
Not sure I understand what you're trying to do. Are you taking over the seller's mortgage payments? Are you trying to buy a property for X but the mortgage balance is more than X?
There should always be enough money at the table to cover existing mortgages and liens.
You can, under certain conditions, together with the seller try to negotiate a so-called short sale with the lender.
Failing that, you will have to bring cash to the closing to cover any deficit caused by the low contract price,
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Luctor et Emergo[ Edited by Hawthorn on Date 02/07/2004 ]
This appears to be the dreaded upside down, wherein the contracts are below the actual monthly payments required.
This is correctable but it does make you look the fool. I suggest the purchase at once of a HP 12c Calculator. It does all of the declining balance problems.
If still arithmeticaly challenged I suggest perhaps an Abacus.
Been there done that. Took over a position only to find the calculations of the contract where short the monthly requirement of Princ & Int. Thank god there was not an impound account. Come to think of it there was a delinq. Real Estate Tax payment.
Cheers Lucius