I have been reading up on what is required to offer seller financing including the requirement that I ensure the buyer's ability to pay and that they meet the debt to income ratio targets. I was looking for a form that I could have the buyer fill out to collect the basic information necessary. I didn't see anything in the "file place". If someone has a starting point for a document they can share that would be great.
Shera- I would consult @Grant Kemp - great resource for these type of transactions.
thanks @Daniel Harnsberger
@Shera Gregory the best thing to do is contact an RMLO who originates owner financed loans for investors. Depending on your volume, it may or may not even be legal for you to collect a form that tells you what you're looking for (if you've done over 5 in a rolling 12 month period you must be licensed to do so). You can view it once collected by an RMLO, but you yourself wouldn't be able to after those 5.
Because there are so many laws and important pieces to meet, and because Dodd-frank has no de minimus rule, it's really just much wiser to have an RMLO do this bit for you.
I am licensed in Virginia and would be glad to help you, but by all means feel free to go with someone else. I'm not saying any of this to force you in to using me, it's just that you really need someone in your corner on these transactions. Much in the same way you wouldn't expect to draw up your own deed of trust/warranty deed, and would instead consult an attorney or title company.
One tip I will give though since you mention dti is that there is actually no maximum dti for someone at your volume of transactions (less than 500 in previous calendar year and less tha 2 billion in assets).
if you've done over 5 in a rolling 12 month period you must be licensed to do so.
Grant, are you saying that a person can do up to 5 seller financing homes without having to be licensed to do so? Somehow I was thinking it was three.
This will be my one and only seller finance deal for the past year and the foreseeable future. I live in Virginia but the house is in Illinois. I have done some preliminary searches to try to find an RMLO to work with in Illinois but haven't come up with anyone yet. Grant -- are you licensed in Illinois too?
I'm sorry, Illinois is one of the few states to not adopt the national license yet
The good news is that since you've yet to do 3, you are not yet required to abide by RESPA or by SAFE. I would be happy to give you some other guidance on things you'll need to look at, but I'm hesitant to throw them up here in the case that someone down the road wants to ignore the 3 and 5 de minimus rules and feels like they got enough info here to go do it. I'll PM you.
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