I would assume the first mortgage and have them (the in-laws) give you a carryback mortgage for either all or part of the remaining $28K. Also, make sure you know how much they are in arrears on the first mortgage, because that will have to be paid up somehow…my approach is to pay that for them and use that as the “down payment”.
Also, what are comparable homes selling for? Is the $85K a good deal or is it their fantasy? Since you are the one helping them, you have all the leverage in the world. Certainly, you don’t want to take advantage of them and leave bad feelings over the deal, but you are helping them out of a financial travesty and, I believe, you should be rewarded (fairly, that is) for that.
All in all, remember this: Don’t let family cloud your judgement. Being fair and equitable goes for them and you, as well. If this deal can’t go forward without you taking on an unnecessary burden, don’t. Don’t make their problems yours.
My fiance and I want to buy her parents home before it goes into foreclosure. They are willing to have us assume the mortgage. The mortgage has a remaining debt of $57K and they want to sell the house to us for $85K.
Instead of going through traditional means of financing the whole $85K, are there such finance companies out there that would lend us the $28K. If not, what other advice you could give us to save their house.
If the property really is worth $85K, they could probably sell it on the open market to somebody who could qualify for a new loan. Even if they paid a real estate brokerage fee, they would get some cash out of the deal, unless there is a lot of work needed to fix it up to good condition.
If they have lived there for at least 2 years, they will not have to pay any federal capital gains tax on any profit that they make. So they should be able to get their cash without taxes, unless your unstateded state has a capital gains tax without an exclusion.
I suggest this approach since you will not have to be burdened with the house, if you do not want to do so. If you were to loan them money to pay the mortgage until the property were sold to some other party, you could secure the loan with a junior (“second”) mortgage or deed of trust on the house, and get paid back at the time of the sale.
Re: Please help…house is to be foreclosed! - Posted by David Garcia
Posted by David Garcia on February 01, 2002 at 16:54:02:
Find out how much the arrearage is (back Payments)
Catch them up, after in-laws sign deed over to you.
keep existing insurance but get another one for landlord.
make payments & make a contract where you will pay your inlaws xx amount of money a month for saving their credit & taking over their home. Maybe they wont care about reciveing money because you saved their credit!! Bonus, you did’ny have to qualify for a loan & pay closing cost.