Buying my brothers duplex

7 Replies

I plan on buying my brothers duplex when he moves out of state. He still has a mortgage on it.

Can I pay my brother the mortgage and he pays the bank, like basically he’s my bank because I can’t qualify for a mortgage.

I’m a registered nurse and length of credit history isn’t good enough to qualify for a mortgage. I’ve only had credit for a year but the score is pretty high 754 equifax.

If he’s my bank, how does that work, how do I know if he’s really making the payments, do I get a title, is it on file that the house is in my name or his, how do I track how much I pay him etc. after a year of doing this I plan on getting my own mortgage. The mortgage company said I could qualify after 1 year.

@Michael Acheampong

The solution is called "buying subject to." Your brother transfers the title to the property to you, and you become the legal owner. However, the mortgage remains in your brother's name, and you simply make the payments on HIS mortgage.

Excellent benefits for you, but your brother takes a risk that you stop paying his mortgage. It's between you two.

Need a real estate attorney to draw the proper documents.

Originally posted by @Michael Acheampong :

@Michael Plaks if I can get a loan would you recommend getting a loan or buying subject to if possible.

Subject-to is usually better because you do not need to tie up your credit and do not need to pay closing costs. Also, the existing loan is already seasoned, and a good portion of the interest has been paid. 

One exception is when the old loan has real bad interest rate, and you can get much better terms with a new loan. Need to run numbers.


Originally posted by @Michael Acheampong :

The balance between the seller price and the loan, do I pay that in cash? How do I go about that.

You're welcome. 

You pay the difference in monthly payments. Requires drafting a promissory note, which is best done by an attorney.