Need some help here. My mother owns a condo that's worth around $100,000 and owes about $72,000 on the mortgage. She currently has a family friend who has been renting it for a couple years but has no interest in being a landlord and doesn't want to think about the property. She is will to hand it over for what shes owes to give me a chance to jump into REI.
My question is how can we get the property into my name without having to pay a down payment. My intentions would be to try and refinance the $72,000 into a new 30yr loan to increase cash flow.
Any help would be great!
I can think of a few options. First, see if the mortgage is assumable. If it is then great. If your mom doesn't mind it being on her credit you can do it subject-to. Meaning, then tenant pays you the rent, you pay your mom the mortgage, she pays the bank, you keep the difference between mortgage payment & rent.
I would also sniff around different lenders, they may have some ideas. Some may allow you to re-fi after 6 months of seller financing, others may allow you to get a new mortgage and count the current equity as a 'gift.'
Talk to some lenders see if they have any other ideas.
Best of luck.
The only assumable loan products I am aware of require you to occupy the property. The best bet to avoid coming out of pocket would be a subject to. After you can show that you have owned the property for at least 6 months, possibly a year depending on lender, then you can refi it at around 75% ltv. You still might have to come out of pocket a few thousand depending on how the evaluation comes in, but it is still better than 25% plus of $72,000.
It there any time of closing cost or bank fees when it comes to a "subject to"?
@Richard Villandry This sounds like a great deal for you! You should definitely talk to a few different lenders, AND the current lender to see what your options are. Best of Luck.
assuming you trust your mother, you can just have her deed the property over to you to show you officially taking ownership. at least 6 months after that, you should be able to get a loan to pay her off and not have to come up with much, if any down payment. I would call a real estate atty to hold your hand through the process for $300 but that should really be about it. deals are easier with people you trust. You will pay all the traditional closing costs when you do your refi with the bank.
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