Owning the mortgage on a house

So - let me see if I understand this - you are looking to bypass the bank (except to pay off your own mortgage) and hold the loan on the house. What if these people (with less than perfect credit) default? After all, that's essentially what less than adequate credit means, that the purchaser is more likely to default. Do you really want to go through the fun of trying to get payments through a collection agency? Or perhaps attempt to bypass any government auction that might occur if these people file bankruptcy?

My suggestion: go the conventional route and sell the house normally. Essentially what happens is that the new mortgage pays for the old one, and you get to walk without financial obligations. Plus, you get to walk without the hassles. And let a bank or mortgage lender worry about whether these people can pay their debts. That's a huge headache for such a large investment (and such a potentially large shortfall).

thutch,

Not sure if you are still looking for advice, since it's almost a month since your post.

I would suggest to you that the first place for you to start would be to have your renters pull their credit report so you know what their credit is like. Make sure they don't pull an infile report. It needs to be a tri-merge. This way you will have their score from all 3 reporting bureaus. Once you have done that......you will use the middle score as their "actual" score. In other words.... if the credit report shows their scores as 600, 540, 580.....the score you would use would be 580.

It is possible to qualify for 100% with a score of 580. It might be an 80/20 combo ....or it might be "one loan" Either way....it can be done. Their debt ratio is another factor, but you can have a ratio as high as 50% with no down payment. Or a ratio higher with a down payment.

Like jespah said.....try to get them to finance on their own if you can. If they don't have a down payment, you can always do a BACK dated land contract. Then it becomes a refinance instead of a purchase....and no down payment is needed. And the good thing about doing that is they will have a mortgage history showing no lates.

If all else fails........you don't have to have your mortgage paid off to do a land contract. If you go that route it's fairly standard to make it for 24 months....with the hopes that they have their credit cleaned up by the end of the contract.

If you have any questions.....you can pm me

~Brooke

How to get a mortgage
The numbers you gave are wrong.

6.5% @ $75000 amortized over 15 years is $653USD/MO
7.5% @ $75000 amortised over 15 years is $695USD/MO

There is no other way to do this transaction except to have your renters prequalified. There are 3 major questions a broker or lender will ask

1) Income-How long they at job
2) Assets-Savings, money put aside for dwn pmt, 401k, stocks etc. (If any)-If they do not have any there are programs for people who have minimal savings and low scores.
3) Credit score-This is the main determonant along woth the other factors mentions above that determines what programs you qualify for.

For more information and for a prequalification you can visit Edit: Moderator: Do not post your links here

Actually mitchiem......his math is correct, right down to the penny

Interesting information.