HAVE SOMEONE WHO WANTS TO PURCHASE A CONDO DOING THIS, IS A LEASE OPTION TO BUY BETTER?
Optional Information: CORONA, CaliforniaAlready Tried: NOTHING
Hello,Can I clarify, You have a condo that you want to sell, and you want to know if a lease option is a better way to finance it for them?Cheers
Reply to Flagbridge-ADR's Post: need to find out what a wrap around loan is first.
I NEED TO KNOW IF THE WRAP AROUND LOAN IS A GOOD CHOICE RATHER THAN LEASING WITH AN OPTION TO BUY???
Hello,This depends on the total of the first mortgage and the market price.It also depends on the value of the property, and what the terms of the lease option are.How much equity is left in the property for the wrap around?Cheers
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WE ARE IN CALIFORNIA, THEY PURCHASED THE CONDO 2 YEARS AGO FOR $230K, THEY ARE NOW SELLING AS LOW AS $199K, THEY HAVE AN INTEREST ONLY LOAN FOR 5 YEARS FIXED SO STILL OWE $230K. THE PROPOSED BUYER WANTS TO COME IN AND DO A WRAP AROUND LOAN AND WE ARE NOT SURE WHAT THAT IS AND HOW IT WORKS, THIS IS OUR QUESTION. IT DOESN'T APPEAR THEY WILL MAKE ANY MONEY ON THE SALE BUT THEY WANT TO WALK AWAY AND PURCHASE A HOUSE RATHER THAN A CONDO AS THEY NOW HAVE A BABY.
A wrap around mortgage is a mortgage on the "equity" that then includes what is owed on the main mortgage. So if they mortgaged the house for 200k, and there is not equity (because they are selling for 200K), they want you to assume their mortgage.A lease option would be different. You would pay monthly (and into an escrow so the bank receives it) and at any time within xx number of months or years you may purchase the property. A certain percentage of the lease payments would go towards your down payment.In this scenario you don't own the land. The other party still does, and the other party has the mortgage on it. They may not be able to get a mortgage for a new home.Another option is get a Vendor take Back. They would sell the house for 200, but they would finance $50k, so you only needed a mortgage from the bank for 150. You own the land, they have a second mortgage on it, and you make two payments a month. One to the bank and one to the old owner.You MUST talk to a real estate lawyer prior to concluding any of these options. They can be VERY VERY technical and if you are not careful you could end up buying someone else's problem.If this has helped please click ACCEPT.
THANK YOU, XXXXX XXXXX NOW APPRECIATE YOUR HELP.
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