Paying off sellers mortgage balance to use seller finance
Hello, I have been talking to a gentleman who is considering selling me his property using seller finance. He does not own the property outright so I offered to pay off his renaming mortgage as my down payment then make monthly payments to him. Does anyone have any advice on how to structure this deal? Also, does anyone have any pros/cons of this.
Thanks!
Have escrow handle it.
You bring XX to the table
Escrow pays off remaining loan balance.
You get deed of trust or something similar depending on the state.
You pay seller monthly or however you structured.
Do not pay off his mortgage and then "buy" the property in a separate transaction .
- Lender
- Fort Worth, TX
- 6,120
- Votes |
- 7,765
- Posts
@Jairus Wilder ummm, if you pay off his mortgage that means you have to provide the funds to do so. I'm guessing you would need to borrow these funds?
-
Lender Texas (#392627)
- Guaranteed Rate
Quote from @Andrew Postell:I have the funds for the down payment so I would not need to borrow that. The seller is looking for monthly income and to avoid capital gains. He was open to seller finance for that reason.
@Jairus Wilder ummm, if you pay off his mortgage that means you have to provide the funds to do so. I'm guessing you would need to borrow these funds?
Quote from @Sean Ross:So this could all be handled in one transaction through escrow?
Have escrow handle it.
You bring XX to the table
Escrow pays off remaining loan balance.
You get deed of trust or something similar depending on the state.
You pay seller monthly or however you structured.
Do not pay off his mortgage and then "buy" the property in a separate transaction .
@Jairus Wilder Depending on his situation he might prefer to have you assume the current mortgage and give hime a cash down payment. Listen to the podcast with Pace Morby to see how he structures these to avoid having the due on sale clause invoked. Depending on the rate on the current loan you might save some money on the rate.