Posted on: 28th Sep, 2009 06:37 am
My Dad is selling us his house.Sale price is $400,000 we put down $150,000 and we are paying $1,500 a month that is applied to princpal only. We have had some credit problems and it will probably take a couple of years to get a mortgage. What legal documentation should we have between us until we can get a traditional mortgage?
you and dad should prepare a promissory note for this loan, which would lay out the terms of your repayment. you'll also need to file a mortgage deed in the local land records. it would be beneficial to you to pay by check, and then retain copies of all the canceled checks during this period of time. you'll then have some evidence of prompt payment to show a prospective lender at that time. also, you'll need to work on your current "credit problems" in order to solve them, which i'm sure you already know.
You need to involve and attorney and have them draft the terms of this agreement that way you do thsi properly.
It may cost you some money but it will be worth in logn run
It may cost you some money but it will be worth in logn run
take legal help of attorney. a well documented agreement will help you
A basic real estate sale transaction involves a promissory note to pay the loan, a warranty deed which gives you title to the house, and a trust deed which gives the lender a mortgage. Record the 2 notarized deeds with the county recorder.
The theory is that the lender gives you title, you give them a note, and then you give the lender back title to hold in trust as security for payment of the note. When you pay off the note, the lender files a "reconveyance" which transfers title held in trust back to you. The titles merge and you now own the house free and clear.
The theory is that the lender gives you title, you give them a note, and then you give the lender back title to hold in trust as security for payment of the note. When you pay off the note, the lender files a "reconveyance" which transfers title held in trust back to you. The titles merge and you now own the house free and clear.
