So, I am in a bit of a situation... The back story:
My parents purchased a property in MT on a land contract about 6 years ago. A very nice property in a great part of MT. My parents cleaned up the property and have since built a nice little log cabin for the two of them. The property is 27 acres with the cabin and horse corrals. They have done a really nice job making it perfect for them.
The terms of the deal required my parents to secure financing for the remainder of the balance after 5 years of payments to the landowner. The balance ended up being about $120K. Unfortunately, during that 5 years, my dad had some medical situations arise that have pretty much destroyed his credit. After the 5 years, he was unable to get financing. So, to bail them out I took out a personal 5-year loan for $75K. My mom covered the rest with her inheritance. I tried co-signing but they were still unable to get financing. For about a year they have been making payments to me every month. I am pretty sure they are having a very difficult time making the payments. Although they would not admit this to me. My dad is very hard headed.
I am wanting to take some of the burden off of them and get the payments down. Since they cannot secure financing I was thinking I could get the property in my name and refinance with a conventional mortgage. They have been talking about subdividing and selling about 1/2 of it. So I am just looking for advice to get the payments down and make it a little easier on my folks.
Any advice or strategy would be greatly appreciated.
@Trailson Moore - Right on for helping your parents out. Our parents do so much for us, it's always nice to be able to pay it back some.
If they have trouble paying you, and might even have a tough time making lower payments, my gut says divide the property, and sell a portion. And try to make the portion that is sold big enough so they can own their part free and clear. If that is not possible, even selling a portion so they can pay off a majority of the loan could be a big help to them.
@Trailson Moore good on ya for helping them out. In family situations like these their often isn't a great option. That being said I think talking to them about moving the property into your name and getting a lower interest cheaper mortgage amortized over a longer period makes great sense. The best business solution is to have them sell and pay you off but suspect that that is not something you or they want to do. So the reality is this is a family matter and you need to discuss it with them, at least give them the option of you getting a mortgage.
I would caution you though there is a real chance that they will not be able to pay you and you will have to make the payments, however since that is already the case I feel like you improve your life and theirs by having the property in your name rather than just an unsecured 75K debt.
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