Assume loan... need help - Posted by Pattie

Posted by JoeS on August 13, 2003 at 06:01:27:

If all you are saying is true…where is the profit margin? Total loans: 550K; value: 550K!!! See what I mean? Unless there is missing information this deal is no deal at all in my opinion.

Assume loan… need help - Posted by Pattie

Posted by Pattie on August 13, 2003 at 02:19:39:

I am a newbie and looking to put together a deal where
the seller has a hundred %mortgagage on a house worth $550,000. The 1st loan is $440,000 and a 2nd of $110,000
She wants to quit claim deed to me, while keeping the loans
in her name pending refinancing. However there is a 2 year hard pre-payment penalty on the 1st, so I cannot refinance
without loosing money. How can I structure this deal and
still make money. I would like to rehab the house but I do
not know how to go about it. PL’S HELP SOMEONE.

Re: Assume loan… need help - Posted by Chireen

Posted by Chireen on August 22, 2003 at 04:06:57:

You’ll have to read the terms of her pre-payment penalty. To you, it is a refinance, but when you refinance, to her current lender it is a sale (from her to you) even though the sale actually occurred previous to that time. If the pre-payment penalty exists only on a refinance and not on a sale, then her current lender cannot charge the pre-payment penalty (unless SHE is the one refinancing). I don’t deal much with pre-payment penalties, but I think many of them have a clause in it that allows for the Borrower to sell the house without incurring the penalty?? Again, you’ll have to read the terms of her note.
Hope that helps.