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Started By
Message
UPDATE: Buyers of My House Having Hard Time Getting Financed
Posted on 6/3/14 at 8:47 am
Posted on 6/3/14 at 8:47 am
***UPDATE 06/26/14
We closed TODAY!
I lost my arse. But it was on the market for 14 months. And it's SOLD. I'll do just like that old saying: "Live and learn."
*******************************
Ok. Here's the situation:
The couple who signed a contract to buy my house are having a difficult time getting financed. But, please, keep reading:
They're selling their current home and will have around $44k after the sale. They wanted to close on my house the same day.
They're purchasing my house for $113k.
The problem is they have four old collections accounts on their credit report. This drives their score down to 613.
My questions:
Is there any hope they could get financed (in ANY form) with that score, given the amount of money they could use as a downpayment? Are there other options besides FHA-type loans they could talk to banks and see about?
How much would their score potentially change (improve?) when their house sells and it's shown as paid on their credit report?
We closed TODAY!
I lost my arse. But it was on the market for 14 months. And it's SOLD. I'll do just like that old saying: "Live and learn."
*******************************
Ok. Here's the situation:
The couple who signed a contract to buy my house are having a difficult time getting financed. But, please, keep reading:
They're selling their current home and will have around $44k after the sale. They wanted to close on my house the same day.
They're purchasing my house for $113k.
The problem is they have four old collections accounts on their credit report. This drives their score down to 613.
My questions:
Is there any hope they could get financed (in ANY form) with that score, given the amount of money they could use as a downpayment? Are there other options besides FHA-type loans they could talk to banks and see about?
How much would their score potentially change (improve?) when their house sells and it's shown as paid on their credit report?
This post was edited on 6/26/14 at 9:13 pm
5
Posted on 6/3/14 at 9:26 am to lnomm34
quote:
They're purchasing my house for $113k.
No they aren't. What will happen is that the deadline will come up, you will exercise the right to keep their deposit for wasting your time and you find a qualified buyer.
I'm not in the industry, maybe someone who is can give you a better answer. But I think the only hope they have is family, especially in today's environment with tight restrictions.
quote:
How much would their score potentially change (improve?) when their house sells and it's shown as paid on their credit report?
Not nearly enough to matter, and it wouldn't change for at least another month. If you willing to wait that long then I have to assume there's some sort of personal ties involved here.
Posted on 6/3/14 at 9:31 am to foshizzle
quote:
Not nearly enough to matter, and it wouldn't change for at least another month. If you willing to wait that long then I have to assume there's some sort of personal ties involved here.
No. No personal ties. Just a small town with a lot of inventory and a bad housing market. I don't want to lose a sale.
I'm considering renting the house to them under a lease with the option to buy. Working out all of the details with realtor and a real estate attorney. But, I want that to be a last resort. And I will need the rent to be pretty high with a big downpayment secured in escrow account if we go that route. Plus, I would want a deadline for purchase if I do rent it to them.
Anyway. Renting/leasing is the last thing I want to do. I'd love for them to be able to go to a small local bank and get financed through some means other than conventional mortgage since they can't get qualified. I hate this process.
Posted on 6/3/14 at 9:53 am to lnomm34
you could do owner financing with a 40k down payment and hope they move out leaving you with 40k and your house. Alternatively you could do a lease option and charge 10k for the option. That way if they don't end up purchasing your house you get the 10k.
Posted on 6/3/14 at 10:18 am to bobaftt1212
quote:
you could do owner financing with a 40k down payment and hope they move out leaving you with 40k and your house. Alternatively you could do a lease option and charge 10k for the option. That way if they don't end up purchasing your house you get the 10k.
was gonna suggest owner financing with a large down payment. If they break their agreement then you keep the large down payment.
You can even put language in the contract that they have a fixed time to "refinance" to a traditional loan to buy you out, basically making this a lease, then purchase. With the large down payment your risk is lowered. That nearly a 40 % down payment
Posted on 6/3/14 at 10:19 am to tigeraddict
if I could get 40 grand I would hope and pray they couldn't get financed. I could sell my 120K house for 100K and still come out ahead. Yes Please!
Posted on 6/3/14 at 10:28 am to tigeraddict
quote:
You can even put language in the contract that they have a fixed time to "refinance" to a traditional loan to buy you out, basically making this a lease, then purchase. With the large down payment your risk is lowered. That nearly a 40 % down payment
This is what I'm thinking.
But what's the difference between owner financing and lease-purchase?
Posted on 6/3/14 at 10:30 am to lnomm34
quote:
Just a small town with a lot of inventory and a bad housing market. I don't want to lose a sale.
Ah, that makes sense then. But no, I don't think they are buying anytime soon.
But as others noted there may be other ways to work it involving renting, rent to buy, etc. Such is life when you want to sell a house when there aren't many qualified buyers, unfortunately.
Posted on 6/3/14 at 10:55 am to lnomm34
there are brokers out there that can do FHA purchase with a 580 score. they are going to have to go FHA. I have a friend that can do these types of loans but they have to live in LA. shoot him an email.Thomas (thomas@atlanticlendingcompany.com)
Posted on 6/3/14 at 11:55 am to hawkeye007
Hawkeye, you friends with Jason over there at ALC?
Posted on 6/3/14 at 1:33 pm to GFunk
nope dont know jason.
Posted on 6/3/14 at 3:20 pm to lnomm34
I can help them out, I have a lender that works with buyers with scores as low as 580, the rate is not bad either, I just locked one today with a 589 score with a rate of 4.125%. with a 613 score I shouldn't have any problems. are the collection accts medical, if so, no biggie.
call me if you want to just talk about their situation.im here in Baton Rouge, 225.291.7901 x 224
call me if you want to just talk about their situation.im here in Baton Rouge, 225.291.7901 x 224
Posted on 6/3/14 at 3:22 pm to lsu tigerdog
Would this apply to out-of-state borrowers? The property is in Mississippi.
Posted on 6/3/14 at 3:27 pm to lnomm34
call investar mtg, I believe they still work with buyers in MS with lower scores.
sorry I wish I could help
sorry I wish I could help
Posted on 6/3/14 at 5:08 pm to lsu tigerdog
quote:
I just locked one today with a 589 score with a rate of 4.125%. with a 613 score I shouldn't have any problems. are the collection accts medical, if so, no biggie.
Never woulda thunk it. When I worked in subprime awhile back the best rates in that range were pretty bad and that was in a looser lending environment.
Posted on 6/4/14 at 3:28 pm to lnomm34
you can call Scott Forte at assurance financial they do sub 640 in MS. dont have the number off hand. i used to work with him good company and a good guy
Posted on 6/4/14 at 10:32 pm to hawkeye007
A chinese friend of mine owns 30 houses. Here is how he makes his money: Let's say he has house for sale for $150k. His terms are 10% down and 6% interest. He has foreclosed and sold one house 3 times in the last 2 years.
Profit.
Profit.
Posted on 6/4/14 at 11:00 pm to lnomm34
4 collections is one thing.
But how much are the collections for?
Do they have an explanation for the collections?
Are they flat broke without the sale of their house? How much are they selling their house for?
$44k in equity could allow a bridge loan to fix their issues (collections) and move them towards a downpayment for you on a lease/option.
But how much are the collections for?
Do they have an explanation for the collections?
Are they flat broke without the sale of their house? How much are they selling their house for?
$44k in equity could allow a bridge loan to fix their issues (collections) and move them towards a downpayment for you on a lease/option.
Posted on 6/4/14 at 11:34 pm to matthew25
quote:
A chinese friend of mine owns 30 houses. Here is how he makes his money: Let's say he has house for sale for $150k. His terms are 10% down and 6% interest. He has foreclosed and sold one house 3 times in the last 2 years.
Profit.
Pretty sure he is doing bond for deed. Not sure how much money he is making when he has to foreclose on people not paying their note.
Posted on 6/5/14 at 6:23 am to meansonny
They're credit cards from years ago (old collections). Not sure exactly how long it's been on their reports.
Total amount is like $4200.
Total amount is like $4200.
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