Sellers New Load
if i bought a house with sub 2 can the owner still get financing for another house if this loan is still there?? also if i keep paying off the loan those the person whos load i took over still gets all the benefits like better credit and will the credit go down if i don't keep up the payments..??
I read several books and their explonations i just don't understand. could anyone help please..
thank you..
If your seller has the credit history and/or the income to substantiate another loan, sure they could get additional financing. Lenders will look at debt-to-income ratios on the sum of the outstanding loans adn decide if the debt burden is too high or not. If it is too high (usually needs to be ~31% or less), your seller will have to come up with SOMETHING that says the first loan pmt is being subsidized by someone else. I dont know what they could use to show this income in a SubTo deal (this would usually be a a lease that shows $xx/mo for a period of time if they had kept the house, moved out and rented the house).
Second questions: yeah, they get the good credit from you making their payments and they get dinged if you dont. Good luck.
Molotov