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We are moving soon and need answers on some questions.
First, Contract for deed,
If we do this and have it recorded and wrote up by professional, will this affect our ability to purchase other home like our [debt to income]
Will it show we have a mortgage when we apply for new? Even though we have contract to prove coverage on new home purchase?
We dont need a large down payment on the contract as you will see, we just want to unload that home..
Here is some numbers[not actual]
Sell home at 15ok with 10k down and carry 140k for 1-5 years at 6.5 interest and payments of 937.00 per month, based on 30yr..with balloon payment at end, and no pre-pay penalties.
Now we purchase our new home say 159k put 94k down on 30 fixed at todays rates..Please note this down payment $ has nothing to do with the contract deed...
How would we do it??
Should we do it? Thanks
You can't have a mortgage (99% of the time) and carry the financing. Most bank contracts have a due on sale clause. If you sell the house the mortgage is due in full. Talk to an attorney.
You can't have a mortgage (99% of the time) and carry the financing. Most bank contracts have a due on sale clause. If you sell the house the mortgage is due in full. Talk to an attorney.
But legally its not really sold untill the balloon payment is made: correct?
We will read our mortgage contract...
But legally its not really sold untill the balloon payment is made: correct?
We will read our mortgage contract...
If this is a contract for deed (land contract), then you should retain title until the last payment. The sale is not complete until last payment made. You should consult with an attorney to be sure you are aware of any negative issues and the legality of your agreement. You may want to post this in the mortgage section for advice from lenders.
I can't even imagine you finding someone willing to participate in a contract for deed or wrap. This is extremely dangerous and un-rewarding to the buyer/tenant; not only that but hat happens when your bank finds out? If I had to guess I would say they would immediately accelerate you loan.
Plenty of buyers are looking to do exactly that. They can't get the financing on their own right now so they are looking for contract for deed deals. It's much more of a risk for the seller than the buyer. If done correctly, it also qualifies for the $8000 tax credit.
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