How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Irwin Law Your Own Question
Irwin Law
Irwin Law, Lawyer
Category: Real Estate Law
Satisfied Customers: 6919
Experience:  Lawyer- Broker 30+years - foreclosure, short sale, liens, title attorney.
18215332
Type Your Real Estate Law Question Here...
Irwin Law is online now
A new question is answered every 9 seconds

I inherited a small real estate business from my father. He

This answer was rated:

I inherited a small real estate business from my father. He had 12 houses sold on contract of sale and/or contract for deed at 8-12% interest.
I heard Texas changed the law prohibiting that, but that he was grandfathered in. Can I refinance these existing contracts at a lower rate? What is the maximum interest rate now?
Do they have to be filed in a court?
I believe that I sent you an information request on this question.
Customer: replied 3 years ago.

I do not see it.


 

Here it is: It is an information request. Sorry for the confusion. I see that this question is a little different and explains what I wanted to know. I will submit an Answer shortly.

 

Hello. Thanks for submitting your question to Just Answer. I want to be clear about what you are trying to do so that I don't answer the wrong question. Are your planning to refinance and remortgage the properties yourself, with your own bank(s), or are you thinking about rewriting the deals with your contract buyers?

He had 12 houses sold on contract of sale and/or contract for deed at 8-12% interest. I heard Texas changed the law prohibiting that, but that he was grandfathered in.

 

I don't know what "change of law you might have heard about, but 8.5% interest is lawful in TX. So are contracts of sale (of land). What you might have heard about is a change in law regarding foreclosure.

 

 

Can I refinance these existing contracts at a lower rate?

Yes, you may do so. Since you can't increase the rate above the existing 8.5% you don't need to be concerned about any maximum rate. There actually is none.

 


Do they have to be filed in a court?

No. They are private agreements. Since you inherited existing deals, it might be advisable to have a local real estate lawyer review the contracts and advise you where you stand legally. Any contract revisions regarding interest rates or other provisions should be handled by a lawyer.

 

I hope that this information is helpful. Please click on a smiley face so that I will be compensated for assisting you. If you have a follow up question please send me back a Reply without entering any rating. Also, be sure to verify this information with a local attorney who is familiar with your local laws and procedures. Thanks again for using Pearl.Com- Just Answer. Your business is appreciated.

 

 

Customer: replied 3 years ago.

You say I can't charge more than 8.5%, but that "there actually is no maximum"?


 

What I mean is that if there is an existing contract at 8.5%, and you wish to re-write it, you can't charge more than 8.5% without the consent of that buyer. I don't know why anyone would agree to an increase in their interest rate.

I hope that this information is helpful. Please click on a smiley face so that I will be compensated for assisting you. If you have a follow up question please send me back a Reply without entering any rating. Also, be sure to verify this information with a local attorney who is familiar with your local laws and procedures. Thanks again for using Pearl.Com- Just Answer. Your business is appreciated.

Irwin Law and 10 other Real Estate Law Specialists are ready to help you
Hi Julie: I just thought I'd follow up to see if you have any more questions about re-doing your land
contracts.

Related Real Estate Law Questions