Seller Financing
I'm looking to sell a condo I currently own. I have never offered seller financing, and was wondering how do you determine if they are qualified for what ever the loan is for?
What happens to the original loan?
How do I report it to the existing mortage company?
Will they call it due?
Anything else I'm missing?
Quote:
On 2004-01-08 10:30, who_me wrote:
I'm looking to sell a condo I currently own. I have never offered seller financing, and was wondering how do you determine if they are qualified for what ever the loan is for?
What happens to the original loan?
How do I report it to the existing mortage company?
Will they call it due?
Anything else I'm missing?
Hello who me,
You will want to run a credit check on the person to determine eligebility and then detemine if you want to give them owner financing. You can finace the whole mortgage or only a portion of it. The original will stay in place and the mortgage company doenst have to know. As long as the mortgage is paid, they normally wont look into it. You will want to make sure the payments are made on time as they are now, I assume and if you wanted to, you could set up the new owners to pay thru you or a Loan Servicing Company. You decide.Hope this helps some. BTW, I like the Lombard area! I spent some time there a few months back and I enjoyed it very much!
Making sure that they are credit worthy is super important. You need to obtain the same info a bank would like to receive on you, if you were applying for a loan, lenght of employment, income, credit score, debt ratio, etc. Most bank loans do have a "due on sale" clause, so you probably don't want them to know you sold it on Land Contract or Lease Purchase, therefore; you need to have all the payments come to you, and then you continue to make your pmts to the bank. On a Lease Purchase you will want to get as large of a down pmt as you can to protect yourself in the event they default in their obligation to you, meaning, you can use their money to stay current while you notify them that they are in default and evict them. Also, don't forget about who's responsibility it will be for ALL taxes, insurance, water and sewer. Do yourself a favor, get an RE Attorney to help you with this. I've seen some good deals and some really bad ones, that could ruin your credit and put a quick stop to your investing.
Good Luck
[ Edited by tclifford10 on Date 01/08/2004 ][ Edited by tclifford10 on Date 01/08/2004 ]
You may also want to take a look at their home and other investment properties that they own. Sometimes people will buy a property, bleed the rents, do nothing to maintain it, and run it to the ground, and then default, forcing you to foreclose and take back a run-down, vacant property.
Who_Me:
Nice to meet you!
you've gotten lots of sound advice already.
to insure you protect your title and prevent possible color of sale and avoid triggering the DOS with the existing lender:
Place Your title within your own simple Living Trust!
IMHO It's not too expensive nor difficult to do. Ands it's SAFER and More Flexible a tool for Seller Financing!
Happy Investing!
Derrick Ali