owner finance?

RedCherry1109

Has any done this? If so, what all does it in tale(sp?)? I have some one wanting to owner finance our house since she wasn't able to get a loan to buy it. The only thing that has me wanting to say no is because she wants to flip the house. So she has no intention of staying in the house. So if I do it would I have to keep insurance on it or could she do it and me not have to keep it. Would I be responsible for anything that goes wrong with the house? Could she sale it while still buying it from me?

Hopefully someone can help me!!

daffy2k

I would speak to a financial advisor and get their opinion. I would expect that if she were to flip the house, the mortgage holder (you) would be paid first and then any remaining profit would go to her. Do you currently have a mortgage on the property? I'm not sure, but I would think that may also be a factor. I'm not sure if the bank would allow you to sell, but keep your mortgage and continue to make payments.

daffy2k

As far as insurance, I think she would hold it. I believe in this situation you are acting like a bank. I would stipulate that she must carry adequate insurance, and that you must be listed as the lienholder. This way you would be given a copy of her policy every year on renewal and the insurance company would be required to notify you if she ever let her policy lapse, a breech in her contract to you and giving you reason to take the property back.

RedCherry1109

Thank ladies. Yes, we have a mortgage on it. I really don't want to deal with it really but the realtor is pushing for it.

daffy2k

I've never looked into it, but I feel like the bank wouldn't be overly thrilled about/even let you finance someone who couldn't get approved by the bank, especially if they hold interest in it as well. You could just call whoever at your bank to see and get the realtor off your back.

LaBellaVida

I'd be weary of this. If the bank won't give her a loan. ... There is a reason why.

I wouldn't do this, but that's me.

RedCherry1109

She couldn't get a loan because she supposedly already has 2 houses in her name.

LaBellaVida

RedCherry1109 said:

She couldn't get a loan because she supposedly already has 2 houses in her name.

Oh I see.

But then the bank wouldn't give a loan because they know she can't afford it with the other two homes she has then I'm sure.

RedCherry1109

I called and said no. I don't have the money to fix it if she damages anything or doesn't pay the mortgage. Plus I do think have the time to deal with, too much going on in my life right now. Don't need the added stress!

Thanks ladies!