Upside Down L/O - Posted by David

Posted by Peter Rzepka Vegas on January 16, 2002 at 22:23:38:

Your buyer is not usually going to cash out before 12 mo.,sometimes not till 36 mo. later. Inflation will make the house worth more and appraisers for mortgage companies will appraise the property higher for loan purposes than otherwise. If your T/B has made all his payments to you on time ,document it and that will help him ,some mortgage companies will look at it more like a seasoned loan than a new loan.

Upside Down L/O - Posted by David

Posted by David on January 16, 2002 at 18:22:29:

Ok, I know there’s got to be an answer to this question, but I haven’t seen it yet…

When I mark up a property and offer it back on the market for a small down payment, and a reasonable monthly payment, how is that person ever going to get financed?

Maybe I’m missing something. It seems to me that if I sold a 100k house for 112k and the buyer only puts down 8-10k, when it comes time for a new loan the buyer will need a lender who can do 100% LTV.

Is that right?

Re: Upside Down L/O - Posted by Ian (Honolulu)

Posted by Ian (Honolulu) on January 18, 2002 at 04:03:46:

Why not owner finance and not make the buyer go through the trouble of getting bank approved? Collect the interest off payments yourself unless you need the cash up front.

Re: Upside Down L/O - Posted by Tim (CT)

Posted by Tim (CT) on January 17, 2002 at 08:39:16:

I’m not a guru on this subject but from what I’ve read (somebody, correct me if I’m wrong), the “option consideration” given to you at the time you signed your contract with your t/b can/will sometimes be looked upon as a “down payment” when the t/b goes to get a mortgage. Don’t forget, it’s not a “down payment” when you get it up front. Make sure your contract specifically states that this is “option consideration”. Not “down payment”. Also, if you give your t/b rent credits and they excercise their option, this can also be looked upon by the mortgaging company as monies that have been pre-paid (or, counted towards the “down payment”). I hope I’m right and I hope this helps.

I would verify this with L/O experts if you can.

Good luck.