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Old 01-24-2010, 10:30 PM
 
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Does anyone have any ideas for creative financing? We have good income, just lousy credit. What does seller carry back mean? I want to purchase a home, have down payment and income. They are willing to rent.
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Old 01-25-2010, 09:04 AM
 
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Seller carry back means the seller loans you part of the purchase price of the property and carries a promissory note, which may or may not be secured by a mortgage (but should be).

So let's say the property is going to sell for 100,000, it will appraise for 100,000, and there is an 80,000 mortgage on it. You might be able to get financing if the loan-to-value ratio is 80%, but maybe not if the LTV ratio is higher. Since you don't have 20,000 laying around, the seller agrees to loan you the down payment of 20,000 so that you can get a mortgage. You give the seller a promissory note, and the seller then records a second mortgage, so if you don't pay him back, he can foreclose.

Since you have to disclose the source of the funds you're using to pay for the home, these don't work very well in residential transactions (unless you lie or just fail to disclose it, which can get you in trouble).

You may be able to buy the home on contract while living in it. You and the seller agree you will pay a certain amount in monthly installments, and when you've made all the payments you own the home.
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Old 01-25-2010, 09:11 AM
 
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Naptowner wrote;
Quote:
You may be able to buy the home on contract while living in it. You and the seller agree you will pay a certain amount in monthly installments, and when you've made all the payments you own the home.
NO NO NO NO NO, Don't EVER buy a house on a "contract for deed". I'm running out of time here but here's a short reason why not. Just ask you attorney the following question; "While I'm paying this guy let's say the IRS PUTS A LIEN ON ALL HIS STUFF. How much will you charge me to get me put BACK AHEAD of the IRS?"

The answer from your attorney will tell you why it's idiotic to do this.

If your credit is shaky FIX THAT, and then consider buying a house. Prices may well be lower in a year anyway.

golfgod
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Old 01-25-2010, 10:55 AM
 
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Here's a thought - rent, save more money, and restore your credit. In two or three years you'll be able to take out a mortgage.

You didn't screw up your credit overnight, so you shouldn't expect it to be able to suddenly borrow money overnight.
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Old 01-25-2010, 08:03 PM
 
1,097 posts, read 3,495,123 times
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Quote:
Originally Posted by golfgod View Post
Naptowner wrote;

NO NO NO NO NO, Don't EVER buy a house on a "contract for deed". I'm running out of time here but here's a short reason why not. Just ask you attorney the following question; "While I'm paying this guy let's say the IRS PUTS A LIEN ON ALL HIS STUFF. How much will you charge me to get me put BACK AHEAD of the IRS?"

The answer from your attorney will tell you why it's idiotic to do this.

If your credit is shaky FIX THAT, and then consider buying a house. Prices may well be lower in a year anyway.

golfgod
Good point. But it's not idiotic advice - although I should have gone on to explain some of the risks of buying real estate on a contract. The fact is, most people will sell a home on contract for about the same price they would charge as rent. And since they are required to sell you the home, you have some recourse against the seller. Of course, that doesn't do you any good if the seller goes broke and files bankruptcy.
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Old 09-11-2010, 08:22 PM
 
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this happened to me what can happen
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