TB Trying To Buy. Bank Wants To See Down PMT

I have a tenant buyer just about ready to purchase a property from me.

Purchase price was $101,565.00
Down Payment $5,000.00
Monthly PMT Credit $1,500 (10 mos. at $150/mo)

How can they show this down payment to the bank so the bank doesn't ask them to come up with it again while still showing they have $$$ in the deal?

Comments(7)

  • joefm263rd December, 2004

    I would assume that you show them the records of what you did. You have reciepts and such I assume and also in your contract it states how much of thier payment goes towards the purchase price of the house?

  • JohnCl3rd December, 2004

    Absolutely.

    Are you saying the buyer will need to work with a mortgage broker/loan officer/underwriter that actually knows what a lease purchase is?

    How is this done so that the $12/hr. bank employee understands?

    JohnCl

  • LeaseOptionKing3rd December, 2004

    Does your Contract state that option consideration will apply towards a down payment if they exercise the Option? Most lenders will go by the Contract. Prepare to show a deposit slip for that day and a monthly bank statement.
    [addsig]

  • tmpringle3013rd December, 2004

    I work with someone who considers a L/O buyout to be a refinance not a purchase. In this scenario, the down payment would not matter, as the appraised value is considered.

  • JoDa8th December, 2004

    Here is how I do it.

    1. The purchase offer you did with your T/B should indicate the binder or non-refundable deposit that you have a receipt slip for that indicates what it is. You have to provide proof of that information to the lender, along with the T/B’s cancelled checks indicating the same. (Important)

    2. You also should have been taking your payments of rent and the extra $150 dollars toward the purchase price or deposit of the house in two (2) separate pmts. One for $1350 that indicates the RENT and a separate cancelled check and or deposit slip and or receipt (proof) that you received $150 in pmts toward their down payment in installments. YOU MUST PROVIDE SOLID PROOF OF THAT TO THE LENDER FOR YOUR TENANT/BUY TO GET THAT CREDIT.

    if you take the payment as one payment $1500, you and your tenant will have a very hard time proving you did in fact get those down payments and credited toward the down payment. The lender will not take your word that you were crediting $150/mo toward the down payment T-H-E-Y W-A-N-T PROOF by showing deposits and cancelled checks. (in most cases).[ Edited by JoDa on Date 12/08/2004 ]

  • LeaseOptionKing8th December, 2004

    Note: If you make rental credit go towards purchase price, you don't need any documentation for that (since it just lowers the sale price).
    [addsig]

  • mitnc21st December, 2004

    This can be done as a refi easily if they have been living in the house 12 months or close can always get an exception. Its a lease with option its a no-brainer for most mortgage bankers.
    [addsig]

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