Mortgage Broker Question??? - Posted by Vic`

Posted by Tom-Pa on April 08, 2000 at 09:37:32:

If you buy the house on a Land Contract the seller can take the whole $900 payment as credit. so this would make it a wash for your seller. A Land Contract is considered a sell by banks. The reason being is that the buyer has to foreclose to get the property back. The buyer has a equitable interest in the property. Good Luck. Tom-Pa

Mortgage Broker Question??? - Posted by Vic`

Posted by Vic` on April 08, 2000 at 24:04:57:

Let’s say you have a seller who is at least open to the idea of doing a L/O. Let’s assume that that seller has a mtg. pmt. on the house of $900. Let’s say that the seller is willing to L/O it to me for that same $900 per mo. Let’s also suppose that this seller wants to buy another house & needs to go through traditional qualifying (full doc.)in order to buy it. My question is this: How much of that $900 first mtg. will count towards the seller’s ratios. In other words he’s paying $900/mo to his mtg. co. & is leasing the house to me for $900/mo. I’ve heard that the banks will only give him credit for 75% of the monthly rent (or in this case, L/O)money that he would be collecting from me. This meanse that if he leases to me for $900/mo. that he would only be able to count $675 (900 x’s 75%)of this as income. This means that when the seller goes to qualify for his new mtg., his income will have to be high enough so that he will be able to absorb this $225 that’ll go towards his ratios. Is this so? If so, is there any way to get around it?

Re: Mortgage Broker Question??? - Posted by Tom A, of PA

Posted by Tom A, of PA on April 09, 2000 at 09:37:02:

Another option… although be careful. A lease from you for the property for $ 1,200 dated earlier than the lease option. The lease option eliminating, over riding, or replacing the earlier lease. It is his decision which one he shows to the bank.

Not a great idea, but feasible.