Posted on: 09th Jan, 2011 04:44 pm
I am renting and would like to purchase the home I'm in or another home. I am looking for a home approx $375k-$425k. I will be putting down $100k. I do plan to seek legal counsel when I formally begin the process (around April) but in the meantime I have the following questions as I am new to this process:
1. Can I divide up the down payment and put for example $10k down & put the rest in escrow to cover the 1st 3 years of mortgage payments, taxes & insurance?
2. In the current home I'm renting I think the owners have borrowed against the home and what they owe may exceed my offer price. Is it common for owners in this situation to still consider owner financing?
2a. Also, is it possible to find out the mortgage balance
on my current property to see exactly how much
the current owners owe?
3. I wanted to pay the 3 years in advance in escrow so I can focus on increasing my income and credit score. If at the end of the land contract term I have problems getting re-financed through a bank, is it possible to revise the land contract to include an extension of the term?
4. In case the owners of my current property are not interested in owner financing, is it possible for a legal or other professional to design me a land contract offer (based on my needs and current finances) that I can use for additional properties I'm interested in? i.e. if I see a home for sale listing, I can approach the listing agent with this land contract offer thats already legally prepared and use it as my offer on the property.
5. As a buyer who is seeking owner financing, what's the best thing I can do to make my request/offer for owner financing most attractive to a seller.
Thanks in advance for you insight!
JB
1. Can I divide up the down payment and put for example $10k down & put the rest in escrow to cover the 1st 3 years of mortgage payments, taxes & insurance?
2. In the current home I'm renting I think the owners have borrowed against the home and what they owe may exceed my offer price. Is it common for owners in this situation to still consider owner financing?
2a. Also, is it possible to find out the mortgage balance
on my current property to see exactly how much
the current owners owe?
3. I wanted to pay the 3 years in advance in escrow so I can focus on increasing my income and credit score. If at the end of the land contract term I have problems getting re-financed through a bank, is it possible to revise the land contract to include an extension of the term?
4. In case the owners of my current property are not interested in owner financing, is it possible for a legal or other professional to design me a land contract offer (based on my needs and current finances) that I can use for additional properties I'm interested in? i.e. if I see a home for sale listing, I can approach the listing agent with this land contract offer thats already legally prepared and use it as my offer on the property.
5. As a buyer who is seeking owner financing, what's the best thing I can do to make my request/offer for owner financing most attractive to a seller.
Thanks in advance for you insight!
JB
Hi johnetteb,
You'll have to put 20% down payment in order to avoid private mortgage insurance (PMI). After paying 20% down payment, if you have some extra money, you can put it in the escrow account for paying off insurance or taxes.
If the owners already have a mortgage on it, then they won't be able to offer you the options of owner financing. This will be considered as fraudulent by the lender. It will be difficult for you to find out how much the sellers owe to their lender.
It will be difficult for you to revise the contract in order to include an extension of the term. You can contact an attorney and he may help you in drafting a contract to buy additional properties.
Thanks
You'll have to put 20% down payment in order to avoid private mortgage insurance (PMI). After paying 20% down payment, if you have some extra money, you can put it in the escrow account for paying off insurance or taxes.
If the owners already have a mortgage on it, then they won't be able to offer you the options of owner financing. This will be considered as fraudulent by the lender. It will be difficult for you to find out how much the sellers owe to their lender.
It will be difficult for you to revise the contract in order to include an extension of the term. You can contact an attorney and he may help you in drafting a contract to buy additional properties.
Thanks