I like short questions and like to give short answers. I'm not sure exactly what you mean.
I'm guessing that you acquired some properties subject two and now want to refinance. The way most lenders work you would first refinance and then deed the property into a trust.
I do know that there are a couple of lenders which will lend on property within a trust. Wells Fargo comes to mind. I've never done it that way.
Hello,
Thank you for your response to my question. Just to clearify, you are saying as the trustee create a new deed in my name or my company name then file it?Then my next step is to seek a refinance refinace? And if so what about the due on sale clause. Or what if the refinace doesn't go through. Also, should I put it in my name to get more money on the refi?
I am waiting for your reply. <IMG SRC="images/forum/smilies/icon_confused.gif"> [ Edited by labellaby on Date 01/29/2004 ]
Hello lab.....y?
Sorry, the page did not save your name.
As for how to refinance a house you bought subject to, simple.
Apply for a mortgage.
Once approved, the lenders underwriters will check title, or during the process and see that you are not personally on title.
They will require in all likelyhood that you do a few things, such as.....
1.Show them the trust docs, proving you own the house.
2. Perhaps deed it from the trustee to yourself prior to close............and yes, only do this at the closing table, when you know you are funded.
It can become part of the closing docs for the refi.
Others very well might allow you to close, and just sign one new deed, or even leave title in the trust, but that is rare.
I just refied a sub2 house last week, had it for 3 years.
I had to deed the house out of the trust, into my name FIRST.
But, right after closing, yes, a new deed was executed to be recorded a few days later, placing the property back into a trust.
Not a real good way to remain anonymous, but ownership really is not mine now, not even ownership of the trust.
Makes me feel better.
Anyway, not that complicated, just talk to the lenders when you apply for the refi, explain that yes, you own the properties, and for planning purposes, they are held in trusts, and the loans are in the original owners names.
Might be a good idea to hire a competent local RE attny to close, even a refi.
Well worth the few hundred bucks to get it done right.
The attny can help alleviate confusion with the lenders, and how you hold title.
Bottom line, let the pros handle it, and use your energy to get a few more houses.
tHANK YOU FOR YOUR INFO.
NOW, my next question is: If we are buying most of our properties subject 2, and the houses is in someone elses name, how do we also build credit at the same time. Since houses give you a higher credit limit which in turn gives you more credit. How do over come this challange. I hope you understand my question. Because, I have paid off my debt but I have not increased my score even though I have small credit cards accounts for $300. It almost seems as though my credit is not moving. I have a 550 middle score. Help me to get this increased.
On a Sub2 property that you own, the loan is in the Sellers name, correct? How can you refinance a loan that is not in your name? I'm sure that I am missing something, but if you have an example I would really appreciate it.
-P
[/quote]
On a Sub2 property that you own, the loan is in the Sellers name, correct? How can you refinance a loan that is not in your name?
[/quote]
When you refi a Sub2, you are completing the sale of the property from the original seller to you or your company. All tax, transfers, and closing fee implications may apply.
You aren't really refinancing the existing loan, you are getting a new loan that pays off the old loan in the process.
Whoever you refi through will check title and see what liens are there and make sure the LTV and your debt ratio are good before approving the loan. At closing, they payoff the liens and give you the proceeds, if any.
It may help to think of the property and the loans as separate entities, which they are. The property is a piece of RE, as represented by the Deed, which you have in a Sub2. The seller's mortgage is just a lien against that property.
Really, what are you trying to say.
I like short questions and like to give short answers. I'm not sure exactly what you mean.
I'm guessing that you acquired some properties subject two and now want to refinance. The way most lenders work you would first refinance and then deed the property into a trust.
I do know that there are a couple of lenders which will lend on property within a trust. Wells Fargo comes to mind. I've never done it that way.
Hello,
Thank you for your response to my question. Just to clearify, you are saying as the trustee create a new deed in my name or my company name then file it?Then my next step is to seek a refinance refinace? And if so what about the due on sale clause. Or what if the refinace doesn't go through. Also, should I put it in my name to get more money on the refi?
I am waiting for your reply. <IMG SRC="images/forum/smilies/icon_confused.gif"> [ Edited by labellaby on Date 01/29/2004 ]
Hello lab.....y?
Sorry, the page did not save your name.
As for how to refinance a house you bought subject to, simple.
Apply for a mortgage.
Once approved, the lenders underwriters will check title, or during the process and see that you are not personally on title.
They will require in all likelyhood that you do a few things, such as.....
1.Show them the trust docs, proving you own the house.
2. Perhaps deed it from the trustee to yourself prior to close............and yes, only do this at the closing table, when you know you are funded.
It can become part of the closing docs for the refi.
Others very well might allow you to close, and just sign one new deed, or even leave title in the trust, but that is rare.
I just refied a sub2 house last week, had it for 3 years.
I had to deed the house out of the trust, into my name FIRST.
But, right after closing, yes, a new deed was executed to be recorded a few days later, placing the property back into a trust.
Not a real good way to remain anonymous, but ownership really is not mine now, not even ownership of the trust.
Makes me feel better.
Anyway, not that complicated, just talk to the lenders when you apply for the refi, explain that yes, you own the properties, and for planning purposes, they are held in trusts, and the loans are in the original owners names.
Might be a good idea to hire a competent local RE attny to close, even a refi.
Well worth the few hundred bucks to get it done right.
The attny can help alleviate confusion with the lenders, and how you hold title.
Bottom line, let the pros handle it, and use your energy to get a few more houses.
Good luck, and HTH,
Jim FL
tHANK YOU FOR YOUR INFO.
NOW, my next question is: If we are buying most of our properties subject 2, and the houses is in someone elses name, how do we also build credit at the same time. Since houses give you a higher credit limit which in turn gives you more credit. How do over come this challange. I hope you understand my question. Because, I have paid off my debt but I have not increased my score even though I have small credit cards accounts for $300. It almost seems as though my credit is not moving. I have a 550 middle score. Help me to get this increased.
Thank you
JimFL:
That was a great and informative answer.
Lab:
Wouldn't a loan servicing company's records of your timely payments be enough to increase your credit score? I think they would.
Were I you, I'd message John$Cash$Locke or WilliamGA.
If you do, could you post their answer?
Thanks,
OnTheWater
JimFL,
On a Sub2 property that you own, the loan is in the Sellers name, correct? How can you refinance a loan that is not in your name? I'm sure that I am missing something, but if you have an example I would really appreciate it.
-P
[/quote]
On a Sub2 property that you own, the loan is in the Sellers name, correct? How can you refinance a loan that is not in your name?
[/quote]
When you refi a Sub2, you are completing the sale of the property from the original seller to you or your company. All tax, transfers, and closing fee implications may apply.
You aren't really refinancing the existing loan, you are getting a new loan that pays off the old loan in the process.
Whoever you refi through will check title and see what liens are there and make sure the LTV and your debt ratio are good before approving the loan. At closing, they payoff the liens and give you the proceeds, if any.
It may help to think of the property and the loans as separate entities, which they are. The property is a piece of RE, as represented by the Deed, which you have in a Sub2. The seller's mortgage is just a lien against that property.
Hope this helps.
Peter
Thanks Peter