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12-12-2008, 03:21 PM | #1 |
Followed the crowd over.
Join Date: Nov 2008
Location: Hawaii
Moto: '07 Yahama R6
Posts: 911
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Real estate/co-signing Q
Wondering if there is anything either/both parties need to be aware of...
Situation is Heather has 2 homes/2 mortgages. She wants to sell one house for what she owes (less than market value) to her friend Sandy. Options are: 1. Heather can re-finance loan to make it assumable. Sandy takes over the loan. 2. Sandy can apply for loan to buy home, but has no down payment. Heather will co-sign and sign the title to the house over to Sandy. |
12-12-2008, 03:22 PM | #2 |
Custom User Title
Join Date: Nov 2008
Location: Central NY
Moto: 2003 SV650S
Posts: 14,959
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are they hot?
(j/k, I have no idea)
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I'm not "fat." I'm "Enlarged to show texture." Handle every stressful situation like a DOG: If you can't eat it or hump it, pi$$ on it & walk away. |
12-12-2008, 03:24 PM | #3 | |
Hold mah beer!
Join Date: Feb 2008
Location: 80 Miles South of Moto Heaven
Moto: 08 R1200GS
Posts: 23,268
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assumable one sounds like less work for Sandy.
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12-12-2008, 03:26 PM | #4 |
Yuppie Prick
Join Date: Nov 2008
Location: Austin, TX
Posts: 223
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There are programs (80/20) for example which allow for no down payment.
One should be careful about co-signing for a loan to a "friend" who from the very very brief description sounds like the 2nd person cant afford on their own. This (again, Im not throwing rocks) sounds like what got us into the mortgage mess in the first place. If I were the owner - I would try to get the new buyer to get a home loan on their own so their is no liability left to me. What if she defaults and you are a co-signer? What if she doesnt assume the assumable loan (which probably has a higher interest rate.)? |
12-12-2008, 03:36 PM | #5 |
Nomadic Tribesman
Join Date: Nov 2008
Location: Brampton, Canada
Moto: '09 ER-6n
Posts: 11,150
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Co-sign = bad. Very, very bad.
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12-12-2008, 03:44 PM | #6 | |
Follower
Join Date: Nov 2008
Posts: 5,549
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Quote:
If Sandy can afford the house, Sandy should get a mortgage. Heather would be a fool to go with either option. Why re-fi to just hand it over? Sell the place to someone with the money or rent to own like Rider mentioned. |
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12-12-2008, 03:46 PM | #7 | |
Yuppie Prick
Join Date: Nov 2008
Location: Austin, TX
Posts: 223
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Quote:
Basically you sign a 2 year lease agreement at a slightly higher rental rate.... upon termination of the lease they can buy the house at a price set up front. If they dont close on the lease, they lose their deposit as well as the rent already paid. My mother did this with a house and ended up making 5-7% more on the transaction by the time she had a 2 year lease agreement up front.... plus no issues with foreclosure. |
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12-12-2008, 03:24 PM | #8 | |
Moto GP Star
Join Date: Feb 2008
Posts: 12,156
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