Installment Sale Question....Please Help
I sold a property on contract 2 years ago. When I sold the property I had a mortgage on it. Since then I paid off my mortgage and the contract buyers still make payments to me. Is it true that I cannot secure a first mortgage against that property because the buyers have ownership interest in it? The contract has a clause that states no title will be transferred until 100% of their note to me is paid in full. Please help. I would like to pull some "equity" out of the property if at all possible
Your buyers hold an equitable interest and maybe equitable title in the home.
I do not know for sure legally, but ethically, you should not borrow against their home. If you were renting, that would be different. If they remain current and you default, they lose their home.
If the CoS was not recorded, or some other cloud recorded by the buyer, you still look like you are the owner. (And could refinance) (and could sell to someone else) Either will get you sued by the Holder of the CoS.
Well the answer depends on a lot of factors. Do you want to buy the house from Mom at its value or is she giving you the house? Why are you doing this deal?
If by "at its value" you mean what the land and house would appraise for then she is selling below what she could get from someone else. However, we are paying her more then what she owes on it, so she will be getting a profit. We are buying b/c we want her lot and we will extend on her house.