I mean, I love them. Have one right now, actually. Both parties can benefit tremendously. There are plenty of people that have big money, but for one reason or another, the bank doesn’t want to give them a loan. Doesn’t mean they can’t afford it…
Example…you make great money, have little debt, but want to get a commercial property. The shit the bank puts you through for a process like this is absurd…if you can even secure the loan…
Or…you can find an owner-hold where the seller could care less about all the BS reasons the bank doesn’t want to give you that loan, get a lawyer, draw up a contract, and have your property in a couple days…
Edit: But credit to you Moboost, for quoting one of the best movie lines of all time…
The thing is it’s not hard to get an FHA loan…hell they will still give you way more of a loan then you can afford.
So the issue being if the bank thinks you can’t afford a house worth X it might be a red flag.
Now that the OP added details about 40k up front it might not be as bad if they get a solid contract in place.
Worst case is they default on the payments can you afford to pay that mortgage + your current one while your trying to take legal action to get them removed?
Yeah but FHA doesnt serve what everyone is looking to do. Theyre super picky about the condition of the house and oftentimes nitpick minor, sometimes even only aesthetic details that will disqualify you from that particular home. Not sure if thats the case here but for instance, if his roof needs replacing any time in the future, boom, not qualified.
Yea but the logic of the FHA is if you can’t afford a huge upfront down payment then you probably can’t afford to fix the house if it needs major work?
If you can afford a larger upfront payment go with a traditional loan.
Well , also if you just dont want to tie up too much money in the down payment but I guess thats null for this argument if theyre looking to drop $40k down lol.
what is the asking price on the house if you were going to put it on the market? Also where about is the house in question? 40k seems like a very decent down payment, as long as you get a real estate lawyer involved w/ the paperwork esp. the part which explains that you keep everything if they “default”
that def puts things in your favor, they lose almost $20k just by avoiding the bank for the first 5yrs and asking you to hold the mortgage, because they’re going to have to pay 10% of the sale price plus closing fees when they finally secure a loan.
Also, FHA loans are assumable as well. Tell her to have her mother get the mortgage and she can assume it after the fact.
If you do do it, you could always put their down payment towards that property (or your new one) and keep enough to cover the payment for 6-9 months should you be forced to make it (ie they stop paying, move out, etc) . You should get the money back in Equity in the house when they do get the loan. I was going to suggest you could also see if you could recast your loan, but VA loans are not able to be recast.
And is this the house in henrietta with the 4 car garage? I remember looking at the listing when you had it for sale thinking “Ïf we were to move up there, that would be a nice house.”
i’d be careful with the VA loan… those aren’t supposed to be on investment properties… does the mortgage service know that the property isn’t owner occupied right now? does the insurance company know?
The mortgage service is aware we are not currently living in the house in Henrietta and that we are renting it. Something in the verbage I read somewhere said you can have two properties, both with a VA loan, not living in one, as long as the total value is under some rediculously high number and the house you live in is worth more or something…
Heard back from our lawyer finally, turns out we cannot do this type of deal since we are still making payments on the house. Their deposit doesn’t quite cover what we owe and the since I’ve started the garage project at our new house we do not have enough in savings to cover the rest. Time to consider the alternatives…
