Posted by Jim FL on May 25, 2005 at 14:14:35:
When the sellers sign the house over to you, they are still liable for the mortgage on it.
However, if you have a contract (purchase and sale agreement) along with a HUD-1 closing sheet, most times, this will suffice with the lender.
As long as the sellers are otherwise credit worthy of course.
Sometimes however, the new lender for the sellers might want some proof that you are making payments on the sellers old loan.
When this is the case, I simply show cancelled checks as proof we are making the payments, not the sellers.
Of course, this means being in the deal a few months before this can happen.
As for the land contract, I suppose if you really entered into one with the sellers, and then converted to a subject to deal, they could have one on hand.
BUT, the contract would be dead, and I’d sure not want my name or companies name signed to a contract out there in someone elses hand that was not a good one.
I don’t advocate doing this, but some do.
Give the seller’s copies of the HUD-1 and the contract, that should be enough, start there.