Can my seller Refinance? - Posted by TroyT

Posted by B.L.Renfrow on June 28, 2001 at 22:36:42:

Sure they can refinance. If they can find a lender to do a “cash out” refi for $65k, they could pay off the existing loan and have the $14k to use for the downpayment on their new home.

How a refinance works? They just find a lender and jump through all their hoops.

Maybe your results will be better, but I’ve never had any luck in talking sellers into refinancing, then moving.

If you can get them to go for it, however, I’d first try to take title subject to the existing (refinanced) loan. Only if they were uncomfortable with that would I suggest lease option, since by holding title in a land trust, I’d have far greater control over the property.

As for the sellers avoiding capital gains tax, there is no capital gains tax due if they sell now and they have used the property as their primary residence for at least two out of the last five years.

Brian (NY)

Can my seller Refinance? - Posted by TroyT

Posted by TroyT on June 28, 2001 at 21:05:25:

Got a call on my ad from a seller in a town I am targeting. There house is on for $76900. They want to move to a place closer to where one of their Daughters goes to school

They have been in the home 8 years and have an outstanding balance on their mortgage of: $51000 with approx. $ 14000 in Equity (from when they bought). The rate is 6.29 due in May 2002. Assumable.

They want to move into a home in the $100 000 - $110 000 range and want to keep their payments manageable. They are open to creative ideas. They called on my ad because it said - " I will buy for home for full price if you are flexible with terms." Their main motivation is to sell and buy another. Mainly to get into another house.

My Suggestion: They refinance and take that money for a D.P. on the home they want. I L/O from them to cover the payments on the mortgage and taxes. Once my Tenant/lessee gets financed we sell and they pay off the outstanding mortgage. This way they avoid capital gains of just selling with the equity and appreciation.

My Questions for you: 1. Will this work? Any other suggestions for Creative Financing are welcome.

  1. Could someone explain to me how a Refinance Works? I haven’t done it myself yet.

This house is cute and would be an amazing Rental. Good Cash flow guaranteed. Their PIT currently is $510 and this could rent comfortable in this area for $850 - 875, utilities separate. I actually have some good prospects from my other ad.