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.