Lease Option To Purchase 1/2 Interest In Sfh
My girlfriend owns her own home and we are thinking of sharing ownership of this property.
Her credit is not good (a recent business mishap), she is currently carrying a mortgage (85%) of value and is unable to refinance at this time. My credit is impeccable.
She has suggested that we might want to enter into a lease/option agreement, worth 1/2 the value of the property, for the amount of time it takes for her to clean up her credit, and then refinance with two individual mortagages.
Any thoughts from the pros?
TIA,
Bruce[ Edited by stillrockn on Date 06/21/2004 ]
Can you explain to us what you mean by going into a lease option agreement worth 1/2 the value of the property? I have a few ideas but need to know what you meant by your statement.
Dave
[addsig]
You indicated that your 'girlfriend' owns her own home. What does that have to do with you?
A lease is only necessary when someone wants to use the property (to live in, etc).
You can have an option without a lease.
You will not find a lender that will lend on the two halves. One title, one loan.
Backing all the way up, what are you or she for that matter trying to accomplish?
There is no reason for you to do anything if the two of you are happy for her to continue owning the place in her own name.
John
[addsig]
Thanks for your reply Dave,
She is currently having trouble meeting her mortgage, allthough she has not missed a payment yet. We are considering moving in together, with marriage being out of the question.
Her property is growing in value, I am in a much better liquidity situation, but I'm not interested in paying her "rent" to share the property. She is not "ready" to allow me to buy out half the property, hence the lease/option idea. A lease would be necessary because of certain co-habitiation laws here in Florida. We were just curious as to the pitfalls, pros/cons to this type of agreement.
I hope this helps,
Thanks,
Bruce[ Edited by stillrockn on Date 06/21/2004 ]
Bruce,
Well, now the picture is getting a little clearer. This is just a girlfriend, marriage is not in the near future, and you are searching for ways to help her while, in the meantime, you are helping yourself.
If she continues to have a problem paying the mortgage payment it won't be long until she lapses on some payments and the situation worsens. I would approach this on a pure business relationship and not let emotions of girlfriend/boyfriend have anything to do with it.
Take the home over on an agreement such as a lease option with an equity split at time of sale. Record your agreement so you, at least, cloud the title. Good Luck.
Dave
_________________
"Opportunity is missed by most people because it is dressed in overalls and looks like work." (Thomas A. Edison)[ Edited by dealfinder on Date 06/21/2004 ]
I think CJ has a good point.
If your girlfriend gets into a "pickle" and she is facing some dire consequences, then help her out by buying the property before it gets too far and she is facing foreclosure. What you do with the property, and her involvement, after you own it is up to you.
Keep in mind that there have been enough "sticky" situations involving husband and wife, never mind girlfriend and boyfriend!
Dave
[addsig]
Thank you all for your input.
We are going to see a real estate lawyer next week. Wish us luck.
Thanks again,
Bruce