Monday, April 24th, 2006 at
7:59 pm
I know I've been talking a lot about buying your own home with No Qualifying, No Credit and No, or very little Cash. Sometmes you can wrap all of these up in one deal but sometimes these techniques are mutually exclusive.
If you have a lot of cash on hand and can put down 35% or more, you no longer have to worry about your credit. In that instance, the mortgage bank is only looking at the equity in the deal. If you default, they will still do okay after they foreclose and sell your home.
On the other hand, if you have really good credit, and the definitiion of "good" or "excellent" can vary from lender to lender, you don't need as much cash. So, if you're stuck somewhere in between, you can try to improve your credit or come up with more cash.
In today's environment with inflation starting to rear its ugly head again and many couples holding down two jobs just to get buy, getting more cash is not always easy. One of the better ways to do this is to come up with a part time job, or a totally new, higher paying job. I know you've already thought of that and like most people are probably stuck thinking, "Yeah, but where?". Read the rest of this entry
Monday, April 17th, 2006 at
4:49 pm
For the past couple of posts, I've been talking about buying your home subject to the current owners' financing. There is no end to the articles and information on this subject that you can find on the internet or in your local book store.
What is usually missing though are the forms needed to actually do the transaction. This has always bothered me. If you pay for a course on how to buy your home with no qualifying, no credit and none of your own cash, why are you not provided with the forms you need? I mean, gee, you paid for the course or ebook expecting it to be complete! Well, one course is complete, and it's one of the least expensive.
Read the rest of this entry
Thursday, April 13th, 2006 at
7:18 pm
A short post. As discussed, most home mortgages have a "Due on Sale" clause which permits the lender to call the loan due if ownership of the home is transferred to another party.
Do not set up a fictitious deal to mislead the bank about what you are doing. Do not do this! Do not even think about misrepresenting what you are doing to the lender. This is fraud and can result in severe criminal penalties. Ever hear of Martha Stewart or Enron?
Some advisors will have you jumping through hoops to set up a title holding trust to get around the Due on Sale clause. In my experience this isn't really necessary. I have never heard of a loan actually being called due because of a "Subject To" financing deal. It could happen, I just have never heard of it. The banks want their money and litigation simply costs them money. They do not like that.
When dealing with the bank be honest. Tell them that you will be making the payments in the future. They will more than likely change their records and be happy to take your money!
Wednesday, April 12th, 2006 at
7:24 pm
So, you found a motivated home seller and reached an agreement. Now what?
Well, now you need to get the paperwork done and close. This is what you have really been afraid of all along, isn't it?
We will get into the actual step-by-step completion of the paperwork later but for now we'll just take a look at an overview of the process.
As I said before, you will buy the home right there at the kitchen table (kitchen table closing). The seller actually signs the Deed over to you on the spot. This means there are no closing costs and no attorney fees! That is why you can agree to pay all closing costs - there really aren't any.
Almost all loans you will run into will have a Due On Sale clause. This means that if the house is sold, the bank can accelerate the mortgage and force the total amount to be due. However, in actual practice, the bank just wants the payments (although you are not officially taking over the payments by assuming the loan). As a general rule, as long as they are receiving the payments, the bank is happy.
Read the rest of this entry
