Comments on: Buying and assuming loan on home for sale by owner? help please?

By: MadMan

MadMan — Sun, 27 Sep 2009 18:04:54 +0000

DO NOT DO THIS WITHOUT A CONTRACT.

This is NOT common practice. When the loan is paid off, he gets the house free and clear. How long will this go on for? 25 years? What happens if you want to move? What happens if he wants his money?

Talk to a lawyer asap.

By: wildbirdie

wildbirdie — Sat, 26 Sep 2009 08:38:09 +0000

No this is not legal. If the loan were assumable, you could take his place on the note. Banks haven’t been writing assumable loans for forty years.

He probably signed a document when he bought the house saying that he promised to occupy it as his principal residence. If the bank finds out, then he broke the contract and the bank can call the loan. Calling the loan means pay the balance in full right now or we’re taking the house.

Even if you don’t get caught, the other person could say “this was rent” and refuse to turn it over to you. He could give you a written contract, but most contracts in this situation specify that if anything bad happens, like one payment being late by one day, the deal is off and the house stays with the seller and you don’t get a refund. If it’s his name on the title, he could legally go to a bank and take out a 200K home equity loan which would result in a lien on the house, for which you would be responsible when you accept the title at payoff. He could get sued, which would result in a lien on the house.

By: Sgt Big Red

Sgt Big Red — Wed, 23 Sep 2009 20:41:39 +0000

You must remember the number 1 rule: DO NOTHING WITHOUT A WRITTEN CONTRACT!!!!

Even though he says he will sign over the deed to you once it is paid, without written documentation filed with the town clerk, he could stiff you. Also all you are doing is keeping his credit score alive, it does nothing for yours.

If you want to be protected, then seek legal council. You will need to do a title search to make sure their are no liens on the property that could pop up later on. Also, if he defaults on any other loans and receives a judgment, then a lien could be placed on the house because it is still in his name.

Hope this answer is of help to you
LEGAL DISCLAIMER: The answer provided here is intended for informational purposes only. It is not intended nor presumed to be legal counsel or professional legal advice

By: Erobes

Erobes — Sun, 20 Sep 2009 18:29:24 +0000

this would technically be legal but I would advise you to tranfer the deed first and then make the payments for him if possible (he would have to trust you). I hope you see the possibility of getting screwed here: he could technically let you pay off the entire loan and keep the deed for himself. Get an attorney to sort this out before you end up with a huge mess. A lawyer could create a document that ensures the transfer to you or perhaps make you both co-owners or borrowers of the house. You are not protected otherwise….
remember never mix business with friends/family…..

By: src50

src50 — Fri, 18 Sep 2009 11:22:49 +0000

I’d see a lawyer on this one.

If you have $100K to put down and make $9300/mo, you should be able to get some kind of loan even with bad credit. Or better yet, just wait a couple of years while you rebuild your credit.