Re: Finance Questions - Seller owns free and clear - Posted by Kristin Stallworth
Posted by Kristin Stallworth on January 04, 1999 at 14:01:14:
While I don’t have any ideas for a deal with no monthly payments, I do have an idea for no down. Does your state allow reverse mortgages? (this is similar)
You could agree to give the seller a monthly allotment and then a lump sum at such time as he needs to move to a care facility.
It could be structured as a higher monthly payment to him with no lump sum, or a lower payment with a lump sum at the end, like a balloon note. He would need to sign a warranty deed and you would need to sign a lease which allowed him possession of his half until such time as he is unable to occupy the property. Make sure that the lease agreement is structured as non-transferable, so that his heirs don’t try to occupy or rent that other half after he leaves.
I suppose you could present the idea to him with no monthly payment, but a lump sum when he leaves, but someone is going to have to pay taxes and insurance at the very least. At the time he moves, you could then take out a mortgage to cash him out, which would allow him funds for his care expenses. If you structured this as a lease option, you might be able to get full credit for any monthly payments made credited toward your down payment on the mortgage you would take down the line.
Just some thoughts off the top of my head… I’m sure others will be able to provide you with more.