Real estate/co-signing Q

[the chi]

Originally Posted by Papa_Complex

Co-sign = bad. Very, very bad.

TRUTH!!

Originally Posted by shmike

Plus 2!

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.

Originally Posted by smileyman

If you want to help Sandy by co signing just know that you are personally responsible for that debt and it will be on your credit bureau. That effects your ability to get any future credit even if it is paid on time since it is an outstanding contingent liability and therefore effects your debt to income ratio.

Best option is to get Sandy to find financing that doesn't involve you.

Second best is leave it in your name with your preferred financing, then lease with option or lease to own to Sandy (or sell under contract) giving yourself a tax shelter on the lease income. Do not transfer ownership untill your paid in full.

These guys know what they are talking about!

I used to do real estate closings, and if a person is on the loan or responsible in any way and the other party defaults, it will all fall on the original person. Unless you are married to or somehow related to a person that would justify this trust (parent/child, etc) I would never suggest co-signing. By doing so, you are giving someone the option to just walk away from it if they decided they didnt want to deal.

If you have a set in stone, legal binding contract for a rent or lease to purchase agreement, this might work, as it operates mostly like a rental. Your mortgage gets paid, and they have the option to buy or lose their already paid "down payment", in which case you still got the mortgage paid and can find another buyer if needed.

[MissHell]

Originally Posted by The Chi

...If you have a set in stone, legal binding contract for a rent or lease to purchase agreement, this might work, as it operates mostly like a rental. Your mortgage gets paid, and they have the option to buy or lose their already paid "down payment", in which case you still got the mortgage paid and can find another buyer if needed.

How does the lease-to-own work? Can the seller change their mind and then the buyer is just SOL?

How is the paperwork done? With an lawyer or real estate agent? or both?

To answer everyone's common Q. The seller does not need to sell, she is trying to help her friend who does not have money saved for a down-payment. The owner doesn't need both homes and is not out to make money on the sale.